Genting's earnings to take hit, but analysts bet on bright side
They cite aid and relief packages at next week's Budget; company's net cash position; and bid for Osaka IR licence
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WHILE the Covid-19 outbreak will have a negative impact on Q1 earnings for Genting Singapore, with research houses lowering FY2020 forecasts by 10-20 per cent, analysts are recommending investors add positions in the casino operator as valuations are attractive.
In a Thursday report, DBS Group Research analyst Jason Sum wrote: "We opine that the 6.9 per cent drop in its share price since the onset of Covid-19 is a buying opportunity for value investors, with a potential re-rating catalyst around the corner." Based on Wednesday's closing price of 87.5 Singapore cents, he added that Genting Singapore shares were trading at an enterprise value to earnings before interest, tax, depreciation, and amortisation (Ev/Ebitda) ratio of 6.3 times for FY2021, lower than its regional peers' average of 9.9 times.
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