ComfortDelGro to benefit from easing of WFH measures, analysts predict

• ComfortDelGro Corp Ltd (SGX: C52) share price reaches S$1.76 per share
• Singapore has relaxed some restrictions on workplace arrangements
• Ridership could thus improve further as more people commute to work
• The vaccine rollout in key markets is also on track, analysts noted
• Trade ComfortDelGro shares with an IG account

ComfortDelGro share price: What’s the latest?

Shares of land transport giant ComfortDelGro - which has taxi, bus and rail businesses globally - were trading flat day-on-day at S$1.76 as of 10:13 SGT on Thursday. About 1.1 million shares changed hands by then.

All 12 analysts covering ComfortDelGro had ‘buy’ ratings, with an average 12-month target price of S$1.91, according to Bloomberg data.

They included research teams from DBS and Maybank, which gave target prices of S$1.99 and S$1.88, respectively, this week.

Working from home is no longer the default

In Singapore, starting from 05 April 2021, up to 75% of employees can return to the workplace at any one time, which is a jump from the previous 50% limit.

In addition, working from home (WFH) is no longer the default, as workplaces in Singapore can now adopt a more flexible and hybrid way of working, such as with staggered start times.

This relaxation of workplace restrictions could support further ridership recovery in the coming months, CIMB analysts said. They expect rail ridership to recover to 90% of pre-Covid-19 levels by end-2021.

Maybank likewise highlighted that the easing of WFH measures and movement restrictions should improve demand for domestic transport.

What else are analysts optimistic about?

The rollout of Covid-19 vaccines across the group’s key operating markets such as Singapore, Australia and the UK are also on track, Maybank analysts said.

‘ComfortdelGro is well poised to enjoy positive operating leverage as ridership normalises,’ Maybank noted.

According to CIMB’s research team, another potential catalyst for ComfortDelGro is the Downtown Line financing framework. If the fixed licence fee for the rail line is waived, there may be 7.2% to 8.6% upside to the group’s earnings per share, CIMB said.

Further paring of taxi rebates in the next few months should also help support the group’s core net profit recovery, said CIMB analysts.

They increased their target price to S$1.82, and reiterated an ‘add’ call.

Meanwhile, RHB said ComfortDelGro remained one of its top ‘buy’ ideas, and gave a S$1.90 target price.

ComfortDelGro’s 2021 price-to-earnings and price-to-book-value valuations are ‘compelling’, amid strong year-on-year earnings growth and robust improvement in its return on equity, according to RHB.

Electric-vehicle collaboration with ENGIE

Separately, ComfortDelGro last week said it is partnering French energy giant ENGIE to jointly bid for tenders in the green electric-vehicle (EV) charging field. They will also explore and deploy clean-energy solutions together.

To start, both parties jointly submitted a bid for a pilot tender called by Singapore authorities, to install and operate more than 600 EV charging points at over 200 public carparks.

Successful tenderers will install charging stations at their allotted carparks by the third quarter of 2022.

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