Why are ComfortDelGro shares rising?

• ComfortDelGro Corp Ltd (SGX: C52) share price rose to S$1.49 on Tuesday (16 August 2022)
• The transport operator posted a 30% gain in net profit attributable to shareholders in the first half
• Maybank analysts have maintained a ‘buy’ call on the stock
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How did ComfortDelGro fare in H1 2022?

ComfortDelGro’s group revenue for the first six months of 2022 increased by 6.7% to S$1.86 billion, with Covid-19 restrictions now relaxed in most countries.

Except for China, which continued to pursue its “Zero-Covid” policy and imposed several lockdowns in the first half of the year, economic activity in all of the geographies that the group operates in have improved.

For the half year ended 30 June 2022, the group registered a net profit attributable to shareholders of S$118.7 million, an increase of 30.4% over the corresponding period last year.

This was largely due to a one-off exceptional gain of S$30.5 million from the disposal of the Alperton property in London. Excluding this exceptional gain, net profit was S$88.2 million.

As the company is in a healthy net cash position with stable forecasted cashflows, the board will return the full net gain from the sale to shareholders in the form of a special dividend – the first time since 2007 that such a dividend has been declared.

Finally, the group ‘maintains a cautiously optimistic outlook for the rest of 2022’.

ComfortDelGro stock price: what’s the latest forecast?

ComfortDelGro shares rallied as much as 2.8% following its latest results.

Looking ahead, the stock has a consensus rating of ‘outperform’ and average price target of S$1.76, according to the latest SGX StockFacts data.

The price target equates to an 18% upside potential from ComfortDelGro’s last traded price of S$1.49.

Maybank’s equity research team maintained a ‘buy’ call alongside a slightly lower price target of S$1.75 earlier this week.

The analysts said the transport operator’s second quarter earnings before interest and tax was ‘slightly below expectations’. Consequently, they trimmed their FY2022 to FY2024 earnings per share ‘marginally’.

Shares are up by 5% in the last one month, and up by 7% year-to-date.

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