SINGAPORE (Aug 3): DBS is maintaining its “buy” call on Breadtalk Group with a target price of $2.04 as it continues to deliver earnings growth, driven by the recovery of its Foodcourt segment.
See: BreadTalk 1H17 earnings treble to $12.8 mil
The group’s core business continues to improve alongside margin expansion from its Restaurant segment and its Foodcourt segment now reporting profits.
In a Thursday report, analyst Alfie Yeo said, “The continued recovery in the Foodcourt segment will drive growth ahead.”
Meanwhile, Breadtalk along with Perennial Real Estate Holdings and Wilmar’s potential en bloc sale of the AXA tower, worth $1.65 billion, will be the catalyst for a re-rating of its stock and generate potential dividends.
See: Consortium including Perennial, BreadTalk could net gain of $398 mil in potential AXA Tower sale
“BreadTalk’s valuation, based on its core business (ex-property investments), is compelling at 18x FY18F PE,” says Yeo.
Shares in Breadtalk are trading 5 cents lower at $1.74 as of 12.11am.
