SGX-listed ComfortDelGro Corporation Limited (SG:C52) retains a Strong Buy rating from analysts, as they remain optimistic about recovery in the company’s operations and future earnings growth. Furthermore, the recent increase in taxi commissions and the successful contract win for the Stockholm metro contribute to the bullish case.
Over the last 12 months, ComfortDelGro shares gained nearly 15% in trading.
ComfortDelGro is a global transportation company with an extensive fleet that includes buses, taxis, and various rental vehicles.
Recent Contract Win
Recently, ComfortDelGro and its joint-venture partner, UK-based Go-Ahead Group, were awarded a contract to operate and maintain the Stockholm Metro. This signifies ComfortDelGro’s first rail contract in Sweden and its largest deal outside Singapore. The contract is spread over a long term of 11 years and is scheduled to commence in May 2025.
DBS analyst Andy Sim views this contract as a significant milestone for the company, positioning it as a major player in the global rail operations landscape. The analyst believes that this deal will enhance the company’s prospects of securing additional rail contracts. Sim anticipates an increase of 0.5% to 2.8% in its earnings forecast for FY25.
Sim confirmed his Buy rating on ComfortDelGro stock at a price target of S$1.67. This implies an upside of 18.4% in the share price.
Another Analyst with a Bullish Stance
Earlier in January, analyst Khang Chuen Ong from CGS-CIMB confirmed a Buy rating on ComfortDelGro stock, predicting a growth of 13.5%. Ong forecasts substantial year-on-year earnings growth in the fourth quarter of 2023 and envisions an additional 15% increase in PATMI (profit after tax and minority interests) in the next fiscal year.
The analyst expects the taxi commission hike in Singapore, the acquisition of A2B in Australia, and favourable industry prospects in the UK to drive earnings growth. These growth drivers, along with an attractive dividend yield, will further boost the stock’s attractiveness.
What is the Target Price for ComfortDelGro?
According to TipRanks consensus, C52 stock has received a Strong Buy rating on TipRanks backed by six Buys and one Hold recommendation. The ComfortDelGro share price forecast is S$1.56, implying upside of 10.31% from the current price level.
