DBS raises target price on Riverstone on rising glove prices, fatter margins

Singapore

DBS Group Research has raised its target price on Malaysia-based nitrile glove manufacturer Riverstone Holdings to S$3.90 from S$3.09 previously.

In maintaining its "buy" call on the stock, analyst Ling Lee Keng cited higher average selling price (ASP) for gloves and improved margins as reasons.

She has revised upwards her earnings forecast for Riverstone by 46 per cent for 2020 and 48 per cent for 2021.

Riverstone shares closed at S$3.07 on Wednesday, down three cents or 1 per cent.

In a note on Wednesday, Ms Ling wrote that the stock was trading at a discount of about 40 per cent to its peers, at a price-to-earnings ratio of 21 times and 19.8 times, respectively based on the 2020 and 2021 forecast earnings. "This is unjustifiable, in our view, given its leadership position in the cleanroom segment", she …