What’s next for DBS shares?
Singapore’s largest bank saw its net profit rise to a record high of S$2.24 billion during the third quarter.
- DBS Group Holdings Ltd (SGX: D05) share price closed lower on Thursday (3 November 2022)
- Singapore’s largest lender third quarter (Q3) net profit grew 32% year-on-year (YoY)
- UOB analysts called the stock a ‘buy’ alongside a higher price target of S$45.75 in their latest investor note
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DBS stock price target: what’s the latest?
DBS shares fell after it announced its Q3 2022 results.
The blue-chip counter has rallied 2.5% in the last one month. On a year-to-date basis, the stock is up by roughly 4.3%.
In terms of stock outlook, the latest analyst sentiments published by SGX StockFacts show a consensus rating of ‘outperform’, alongside a price target of S$39.11 on the stock.
The price target equates to a 14.4% upside potential from DBS’ last traded price of S$34.20.
UOB’s equity research team rated DBS shares a ‘buy’ on 25 October, while lifting their price target to S$45.75 from $43.60.
How did DBS fare in Q3 2022?
The group’s net profit rose 32% from the same quarter a year ago to a ‘record’ S$2.24 billion, surpassing UOB’s prediction of an 18% increase to S$2.01 billion.
Return on equity reached a ‘new high’ of 16.3%, while total income also rose to a ‘record’ S$4.54 billion, as ‘net interest margin recovered to pre-pandemic highs and business momentum was sustained during the quarter’.
The cost-income ratio improved seven percentage points to 40% during the quarter. Asset quality ‘continued to be resilient’ as the NPL ratio improved to 1.2% alongside ‘minimal’ specific allowances. General allowances of S$153 million were set aside.
For the third quarter, net interest income rose 23% from the previous quarter and 44% YoY to S$3.02 billion.
Net interest margin climbed 32 basis points from the previous quarter to 1.90%, accelerating from increases of three basis points and 12 basis points in the first and second quarters, on the back of further increases in interest rates.
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