Why did Keppel shares rise to a 6-month high?

• Keppel Corp Ltd (SGX: BN4) share price hit a six-month high on Monday (2 August 2022)
• The conglomerate saw net profit surge 66% in 1H 2022
• UOB and CIMB analysts have kept ‘buy’ and ‘add’ calls on the stock
• Keen to trade Keppel shares? Open an account with us to start today.

Keppel’s 1H profit burgeons 66%

Keppel shares have risen over 3% since it reported its financial results for the first half (1H) of 2022.

The offshore, marine and property company posted an overall net profit of S$498 million for the half year ended 30 June 2022.

This was an increase of 66% over the previous year, which the group attributed to profitability across all segments including the discontinued offshore & marine operations.

Excluding the discontinued operations, the group’s net profit from continuing operations in 1H 2022 was S$434 million, or 26% higher year-on-year.

The group’s revenue from continuing operations grew 16% to S$3.4 billion in 1H 2022 from S$2.9 billion in 1H 2021.

This was due mainly to a significant increase in contributions from the Energy & Environment and Asset Management segments, which ‘more than offset’ the decline in Urban Development’s revenue, Keppel stated.

Keppel stock price: what’s the latest forecast?

The conglomerate’s stock has been in an uptrend in the last one month, increasing roughly 6% since 4 July 2022.

On a year-to-date basis, Keppel shares are up by 34%.

In terms of stock outlook, Keppel shares have an average price target of S$7.30 and rating of ‘outperform’, based on the latest SGX StockFacts consensus data.

The price target represents a 5.5% upside potential from its last traded price of S$6.92.

The latest call came from UOB analyst Adrian Loh, who reiterated a ‘buy’ call and price target of S$10.11.

He wrote that Keppel’s net profit and dividend of S$0.15 per share were better-than-expected. The proposed dividend amount represents a payout ratio of 62%, which is higher than its historical payout ratio of 39-59% in the past 10 years.

However, UOB remains ‘cautiously optimistic that its China property business would turn around in the medium term’.

CIMB analyst Lim Siew Khee has also maintained an ‘add’ rating with a higher price target of S$9.37 (from S$7.20).

Her higher target price was given to ‘reflect’ Keppel’s ‘asset-light strategy’. She also raised her FY2022 full-year dividend sum to S$0.31 in view of the strategy.

Thinking of trading Keppel shares?

Go long or short via CFDs on Keppel and other Singapore shares with our award-winning platform.* Open an account with us to start trading shares immediately.

_{*Awarded the Best Online Trading Platform by Influential Brands in 2021.}