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UOB Kay Hian positive on ComfortDelGro with new Australian contract

Bryan Wu
Bryan Wu6/27/2022 03:54 PM GMT+08  • 3 min read
UOB Kay Hian positive on ComfortDelGro with new Australian contract
UOB Kay Hian's Llelleythan Tan has kept a “buy” rating with a higher target price of $1.73. Photo: CDG
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UOB Kay Hian analyst Llelleythan Tan has kept a “buy” rating on ComfortDelGro Corporation (CDG) with a higher target price of $1.73 from $1.66 previously.

Tan’s higher target price is pegged to its average five-year mean P/E of 16.4x. The estimated target price is due to in part to higher 2022 earnings forecasts from CDG’s new public bus service contract in Australia’s Northern Territory.

On June 2, CDG’s wholly-owned subsidiary, ComfortDelGro Corporation Australia (CDC) had been awarded a six-year contract to solely operate public bus services in the Northern Territory. The contract areas cover a significant part of Northern Territory’s network which includes Darwin and Palmerston, with 170 buses operating across 180 bus routes.

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