‘Iran conflict impact mixed’: Maybank Securities upgrades Wilmar to ‘buy’ on constructive outlook, despite headwinds
The brokerage lifts its target price by 23.4% to S$3.85
Add BT as a preferred source
[SINGAPORE] Maybank Securities has upgraded its call on Wilmar International to a “buy”, citing earnings tailwinds for the agribusiness, as its 2026 outlook remains constructive amid geopolitical and operating headwinds.
On Tuesday (Mar 10), the brokerage raised its target price for Wilmar by 23.4 per cent, from S$3.12 to S$3.85, S$0.32 or 9.1 per cent above its latest closing price of S$3.53 on Monday.
Highlighting that Wilmar delivered a “resilient” performance in FY2025 – the group posted a 38.3 per cent rise in net profit to US$815.9 million for the second half of the financial year and a 20.6 per cent increase in full-year earnings to US$1.41 billion – Maybank Securities analyst Hussaini Saifee said that the company’s earnings are “on an upward trajectory”.
“Forward momentum is intact, supported by mid-single-digit growth in food product volumes, stable pricing conditions, and continued product mix optimisation, underpinning a projected 9 per cent FY2025 to FY2028 earnings compound annual growth rate,” he said.
He noted that the “bulk of regulatory overhang” facing the company is largely behind, with adequate provisions having already been recognised.
Foreign-exchange movements may benefit the company, with the weakening of the greenback against the Chinese yuan, Australian dollar and euro providing “incremental earnings tailwinds” for Wilmar, which derives around 55 per cent of its revenues from these geographic locations.
Navigate Asia in
a new global order
Get the insights delivered to your inbox.
“With earnings on an upward trajectory and leverage trending lower, balance-sheet flexibility is improving, creating scope for potential dividend enhancement,” added Saifee.
As Wilmar’s net debt to earnings before interest, taxes, depreciation and amortisation of 1.7 times remains “comfortable”, the analyst said that its earnings trajectory signals “potential for dividends to increase accordingly”.
However, he noted that the impact of the Iran war on Wilmar’s business could be “mixed”. While elevated crude oil prices could support biofuels, this could be offset by higher freight and insurance costs alongside potential demand softness, in the event that the conflict escalates.
Stable growth trajectory
Notwithstanding the geopolitical and operating headwinds flagged by management, Saifee said that the granular 2026 outlook for Wilmar remains “constructive”.
This comes as food product volumes are guided at mid-single-digit growth, with double-digit expansion in newer categories such as flour, rice and noodles.
Notably, China’s improved growth outlook and increased services consumption presents upsides for Wilmar, Saifee said. This factor could drive up volumes for the company, which derives more than 90 per cent of its revenues from high-growth emerging markets such as China, India, South-east Asia and Africa.
He added that global supply-demand dynamics support stable pricing and positive refining margins in Indonesia and Malaysia, and noted that even though soybean margins are set to soften, with plantation output coming in weak in early 2026, recovery is anticipated.
Decoding Asia newsletter: your guide to navigating Asia in a new global order. Sign up here to get Decoding Asia newsletter. Delivered to your inbox. Free.
Copyright SPH Media. All rights reserved.
