SINGAPORE (Nov 7): RHB Research is maintaining its “sell” call on BreadTalk Group with a lower target price of 75 cents from $1 previously, after cutting FY18-20 forward earnings estimates by about 30% per annum to factor in the gestation of new businesses as well as higher interest costs.

The research house has also lowered its target EV/EBITDA for BreadTalk’s core business to 5.5 times from 7 times previously in its sum-of-parts valuation to account for a slower growth in EBITDA.

In a Wednesday report, analyst Juliana Cai says she sees BreadTalk’s share price as currently overvalued, considering how the stock trades at 39 times FY19F P/E ex-property investments value compared to its peers, which are trading at an average of 20 times.

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