First Resources - RHB Invest 2023-07-24: Valuations Are Now Fair; Upgrade To NEUTRAL

• Following the upward revision of our CPO price assumptions, we believe First Resources (SGX:EB5) is now fairly valued, trading at 9x FY24F P/E vs its peers’ range of 5-10x. Upgrade First Resources to NEUTRAL from Sell, with new S$1.40 target price from S$1.20, 6% downside, ~5% FY23F yield.
• - Read this at SGinvestors.io -
• Supply is expected to come in strongly in 2024, while demand remains somewhat lacklustre. Stock/usage ratios are still comfortably above historical averages in 2024F.

2023 CPO price assumptions unchanged, 2024 assumptions raised

• - Read this at SGinvestors.io -
• For 2024, if the El Nino is a moderate one, there would be an impact on supply – although not very significant – while prices could continue to be held back by lacklustre demand. We believe prices could be higher in 2H24 vs 1H24, as the impact of El Nino would only be seen from May/June onwards. We are therefore raising our 2024 and 2025 price assumptions to MYR3,900/tonne and MYR3,800/tonne respectively.
• If the El Nino turns out to be a strong one, we will review our price assumptions.

We maintain our NEUTRAL sector weighting

• Read more at SGinvestors.io.

Above is an excerpt from a report by RHB Securities Research.
Clients of RHB may be the first to access the full PDF report @ https://www.rhbtradesmart.com/.

Read also RHB's most recent report:
2024-11-15 First Resources - Q-o-q Earnings Decline Despite Stronger Output.

Previous report by RHB:
2024-11-12 First Resources - Fairly Valued Despite CPO Price Assumption Hike.

Price targets by 2 other brokers at First Resources Target Prices.

Listing of research reports at First Resources Analyst Reports.

Relevant links:
First Resources Share Price History,
First Resources Announcements,
First Resources Dividend Payout Dates & Corporate Actions,
First Resources News