DBS Vickers is maintaining its “hold” call on Olam International but cutting its target price to $1.58 from $2.01, citing low free cash flows.
The brokerage and research house sees significant potential for Olam’s earnings to rise if it can execute its plans, but it prefers to wait on the sidelines for now amid the weak outlook for commodity suppliers.
“Given the negative sentiment surrounding other commodity trading companies such as Glencore and Noble Group, we believe investors may continue to shun the sector,” DBS says.
But Olam's immature assets such as plantations and a successful integration of the cocoa business acquired from Archer Daniels Midland (ADM) may boost earnings in coming years, says DBS.
At 9.02am, Olam is up 0.94% at $1.62.
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The brokerage and research house sees significant potential for Olam’s earnings to rise if it can execute its plans, but it prefers to wait on the sidelines for now amid the weak outlook for commodity suppliers.
“Given the negative sentiment surrounding other commodity trading companies such as Glencore and Noble Group, we believe investors may continue to shun the sector,” DBS says.
But Olam's immature assets such as plantations and a successful integration of the cocoa business acquired from Archer Daniels Midland (ADM) may boost earnings in coming years, says DBS.
At 9.02am, Olam is up 0.94% at $1.62.
Click Here To Register For Free Trial Services OR Give A Missed Call : +6531581402 Follow Us On Twitter : www.twitter.com/epicresearchsg Like Us On Facebook : www.facebook.com/EpicResearchSingapore Need Any Assistance Feel Free To Mail Us at : info@epicresearch.sg
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