- ComfortDelGro (SGX:C52)'s 1Q26 revenue/PATMI were below expectations at 22%/19% of our FY26e forecast. Underlying PATMI in 1Q26 fell 16% y-o-y to S$40.5mil. The largest drag to earnings was the 45% y-o-y collapse in operating earnings to S$17.5mil.
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- Disruption to Middle East airlines’ airport transfer bookings in the UK.
The Positive
Improving margins of London bus contracts.
- Metroline London contract margins continue to improve. It was not particularly impactful in 1Q26 results, with UK and public transport margins down y-o-y.
The Negative
Taxi earnings decline intensifies.
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Outlook
- It will be a challenging environment for ComfortDelGro, especially with the recent jump in fuel prices. Fuel prices are largely a pass-through (with a lag) for the public transport operation and borne by taxi drivers. The falling taxi fleet will persist particularly with the intense competition.
- Gross CAPEX will decline by around $200mil to S$500mil in FY26 in the absence of the Metroline Manchester investments.
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