Broker's take: OCBC lowers DBS to 'hold' after post-earnings rally
OCBC Investment Research has downgraded its call on DBS Group Holdings to "hold" with a fair value of $29.18 after the bank's shares gained 3.6 per cent on Monday following better-than-expected first quarter earnings.
Head of research Carmen Lee, noted that following DBS's gains on Monday, the bank's shares are trading close to the research house's fair value for the counter. She added that investors can consider buying shares if DBS's stock price hits S$27.50 or lower.
As at 10.45am, DBS shares were trading S$0.29 or one per cent lower at S$28.11.
Ms Lee said that the banking sector "has done well in the last month", with the three local banks stocks appreciating at an average of 11.6 per cent from March 26 to April 29, compared to the seven per cent gain across the FTSE ST Financial Index.
On Monday, DBS posted first quarter net profit of S$1.65 billion, up 9 per cent year on year and 25 per cent quarter on quarter, on higher margin, strong trading income and a S$100 million write-back due to improved credit quality. Its results beat a Bloomberg consensus of S$1.48 billion.
The bank also revealed that it has decided to pay dividends on a quarterly basis instead of a semi-annual basis to provide to provide shareholders with more regular income.
Following its first quarter earnings release on Monday, other research houses have maintained their "buy" recommendations on DBS.
Jefferies Singapore equity analyst Krishna Guha has a target price on the stock of S$31.50. Meanwhile, UOB Kay Hian has a target price of S$30.50, while RHB Research Institute has a target price of S$30.80.
DBS will trade ex-dividend of S$0.60 on May 2 and S$0.30 on May 17.
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Companies & Markets
Porsche posts Q1 profit drop on ramp-up costs
IBM plots US$730 million expansion of Canadian semiconductor site
Seatrium unit to fully redeem S$500 million worth of floating-rate bonds early
Yeo Guat Kwang, John Chen retiring from corporate boards
US: Wall St opens higher
Air China orders homegrown C919s in challenge to jet duopoly