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.