- We remain positive on Venture Corp (SGX:V03) even though we anticipate a tough 2Q23 earnings as valuations remain compelling at -1 standard deviation (~13x forward P/E) of its historical mean P/E (16x forward P/E).
- - Read this at SGinvestors.io -
We anticipate 2Q23 to be weak for Venture Corp.
- 1Q23 has seen softer overall demand on a weaker customer outlook, with most domains seen declining. We do not expect 2Q23 to be much improved and believe overall customer demand remains weak.
- US GDP growth for 2Q23, based on consensus expectation, is only a slight uptick at 2% from 1.8% in 1Q23. Similarly, S&P 500’s earnings per share for 2Q23 based on Bloomberg data is US$53.51 (-2% q-o-q, -1% y-o-y). Both indicators are likely to suggest that demand from large international corporate clients may have remained largely comparable from 1Q23.
Cut FY23-25F earnings by 8% each.
- - Read this at SGinvestors.io -
- While FY23F earnings decline is now 12% y-o-y, we still expect Venture Corp's net profit to grow 5% y-o-y in each of FY24F-25F. Our target price for Venture Corp is correspondingly reduced by 6% from S$19.40 as we roll over our earnings base from 16x FY23F P/E to blended FY23-24F P/E.
Still a BUY.
- Read more at SGinvestors.io.
Alfie Yeo RHB Securities Research | https://www.rhbgroup.com/ 2023-07-20
Read also RHB's most recent report:
2024-11-11 Venture Corporation - Soft Demand Delaying 2H Recovery; Maintain BUY.
Previous report by RHB:
2024-08-07 Venture Corporation - Recovery Into FY25 On Track; Keep BUY.
Price targets by 3 other brokers at Venture Corp Target Prices.
Listing of research reports at Venture Corp Analyst Reports.
Relevant links:
Venture Corp Share Price History,
Venture Corp Announcements,
Venture Corp Dividends & Corporate Actions,
Venture Corp News Articles
