Will DBS Group shares hit S$35 in 2021?

• DBS Group Holdings Ltd (SGX: D05) share price hit a one-month high of S$30.22 last Friday (02 July 2021)
• Singapore’s largest bank’s stocks rallied ahead of the US government’s June 2021 labour report
• The blue-chip counter is up 18% year to date
• Analysts see a further 8.5% upside on the stock in the next 12 months
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DBS Group stock price: What’s the latest?

DBS Group shares rose as much as 3.4% last week, amid a global rally that had come in anticipation of the release of the US government’s June 2021 jobs data.

This was the blue-chip stock’s largest price boost in nearly two months.

The Straits Times Index, which tracks the 30 largest stocks listed on the Singapore Exchange (SGX), was also up roughly 1.8% during the same period.

Two weeks ago, the group's share price fell after customers reported a payment processing glitch that caused duplicate transactions on some debit and credit cards.

Year to date, Singapore’s largest bank by market capitalisation is up 18%.

How do analysts view DBS’ stocks?

The latest analyst sentiments published by SGX StockFacts show a consensus rating of ‘outperform’ and average target price of S$32.46 on the counter.

The target price represents an 8.5% upside potential from the stock’s last traded price of S$29.93 on Monday (05 July 2021).

CIMB analysts reiterated an ‘add’ call and price target of S$32.64 on DBS Group in their latest note on Singapore’s three main banks on 23 June 2021.

They had reiterated an ‘overweight’ stance on the sector, choosing to stay invested to ‘reap the economic rebound ahead as social distancing measures are eased across the region while share price momentum from rate hike expectations sets in’.

CIMB also sees scope for net interest margin upside for Singapore banks as early as FY2023, with the US Federal Reserve expecting rate hikes by next year — earlier than its original end-2023 timeline.

The most bullish outlook, however, had come from UOB’s Jonathan Koh, who gave a stock price estimate of S$35.45 earlier this month with a ‘buy’ rating.

Koh noted that Singapore’s largest bank has been the least affected by the resurgence of Covid-19 infections in emerging markets across Asia.

Regional economies afflicted by resurgence of Covid-19 infections accounted for a smaller 7.5% of total income for DBS (Indonesia and India), as compared to 24.9% for OCBC and 29% for UOB.

He also cited the group’s guidance upgrade for loan growth to mid-to-high single-digit for 2021, versus 2020’s +4.2%.

What’s your call on Singtel shares?

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