Credit Suisse has raised its target price for Singapore-listed palm oil firm Indofood Agri Resources to $1.63 from $1.40 and maintained its neutral rating.

By 11:31 a.m., shares of Indofood Agri were 1.7 % higher at $1.47 and have gained about 17% since the start of the year.

Credit Suisse said it has raised its earnings per share estimates for Indofood Agri by 21% in 2012 and 16% in 2013, to reflect its expectations of higher palm oil prices in the next two years.

 

Indonesia’s new crude palm oil export tax has made the country’s upstream companies have higher earnings sensitivity to a change in palm oil prices, Credit Suisse said.

 

For every 100 ringgit increase in palm oil price, Indofood’s earnings will rise by 4.6%, the brokerage added.