Why are CapitaLand Investment shares falling?

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  • CapitaLand Investment Limited (SGX: 9CI) share price dropped by an additional 1.3% this week
  • The blue-chip counter closed the week at S$3.87 a share on Friday (03 June 2022)
  • Analysts foresee an 11% price upside potential for the stock in the next 12 months
  • Keen to trade CLI shares? Open an account with us to start today.

CapitaLand Investment stock price: what’s the latest?

CapitaLand Investment (CLI) shares continue to slide this week, despite CIMB analysts newly initiating coverage on the counter with an ‘add’ rating.

The real estate investment company’s market capitalisation has declined by approximately 6.5% in the last one month, as markets entered sell-off mode amidst ongoing recessionary concerns related to higher interest rates and restrictive national Covid-19 measures.

In terms of stock outlook, CLI shares have an average rating just above ‘outperform’ and an average price target of S$4.29 a share, according to the latest SGX StockFacts data.

The price target equates to an 11% upside potential, based on CLI’s last traded price of S$3.86.

How do analysts view CLI?

Last week, CIMB’s equity research team kicked off coverage on CLI with an ‘add’ call and target price of S$4.59 a share.

The price estimate was pegged to an assumed 10% discount to a sum-of-parts revalued net asset value of S$5.10.

In the investment note, CIMB also forecasted a 16% compound annual growth rate in operating profit after taxation and minority interests (PATMI) over FY2021-FY2024.

This is expected to be driven by growth in funds under management and fee income, efficient capital deployment, and improved operating performance of its investments and lodging properties as borders reopen.

‘We believe this will underpin return on equity expansion from operating PATMI from 3-4% (between 2017-2020) to ~5% by FY2024 and narrow its current valuations gap versus peers,’ the researchers wrote.

Meanwhile, UOB maintained a ‘buy’ rating on CLI shares alongside an unchanged target price of S$4.13 on 13 May 2022, citing no changes to its earnings forecasts as the company’s outlook for 2022 ‘remains strong with China potentially providing more earnings certainty should Covid-19 restrictions be lifted’.

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