CLSA upgrades SMRT (S53.SG) to Underperform from Sell as the shares are now trading nearer to its $2.05 target.

But it says there are still no catalysts in the short-term. It expects the rail operator's new Circle Line to take another 3-4 years to breakeven.

“Our checks indicate only a slight increase in daily Circle Line ridership for October and November.”

It adds, near-term cost pressure is mounting as SMRT adds 220 more trains each week in December to cater to the holiday season and suggests switching to rival ComfortDelgro (C52.SG) for better valuations and prospects.

The shares are +1.0% at $2.03.