CGS-CIMB Research has initiated coverage on SBS Transit with an “add” rating, making it the first brokerage in Singapore to do so. The brokerage has also given the stock a target price of $3.40, representing a 21.9% upside to the stock’s last closed price of $2.79 last Friday (September 18).

CGS-CIMB analysts Ong Khang Chuen and Darren Ong are positive on the counter as they expect passenger traffic on public transport to return to around 90% of pre-Covid levels by FY21F.

The analysts are also upbeat on the stock due to its position as a market leader in the public bus industry, which generates defensive earnings and stable cash flow under the Bus Contracting Model (BCM).

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