DBS initiates coverage on SBS Transit with 'hold' call, S$3.44 target price

Singapore

DESPITE recent developments in Parliament that hinted at potential support for the Downtown Line, DBS Group Research said it is "erring on the side of caution" for land transport operator SBS Transit, given the government's outsized fiscal measures provided in view of Covid-19.

On Thursday, it initiated coverage on the stock with a "hold" call and a S$3.44 target price to represent 21.7 times FY2022 price-to-earnings (P/E) estimates. This target is close to the stock's 10-year mean forward P/E of 21.2 times, as well as its 10-year mean price-to-book (P/B) value of 1.74 times.