The easing of Covid-19 restrictions should further boost public transport ridership and translate to higher demand for taxis in Singapore, says RHB Group Research analyst Shekhar Jaiswal. 

Jaiswal has maintained his ‘buy’ call for ComfortDelGro Corp (CDG) with an unchanged target price of $1.90 after the government announced that from 5 Apr onwards, working from home will not be the default option, with up to 75% of employees allowed at the workplace at any one time, compared to 50% previously.


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Jaiswal believes re-rating catalysts are at play, which will improve CGD’s operations q-o-y for the rest of 2021. Besides the boost in public transport ridership and taxi demand, he views that the earlier-than-expected opening of international borders, accelerated vaccination drives abroad in Australia and UK (where CDG has operations in), and changes to the Downtown Line’s (DTL) financing framework offer “material upside risks” for his earnings estimates.

To that end, he expects strong earnings growth for CDG in FY2021 ending December and forecasts over 200% y-o-y in profit growth.

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“Based on current forecasts, we estimate that a full recovery in earnings to pre-COVID-19 levels could take more than two years,” he adds.


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His DCF-derived target price of $1.90 implies 19 times FY2021 P/E. While higher than CDG’s 10-year average P/E, Jaiswal views this as reasonable in view of the expected strong recovery in CDG’s earnings.

As at 9.53am, shares in CDG are 2 cents or 1.18% higher at $1.71.