Thus far, RHB notes that spot CPO prices have moderated from RM4,600-RM4,800/tonne in 1Q2025 to a low of RM3,780 in May, only to bounce back to RM3,900-RM4,100 currently. The decline was mainly driven by geopolitics in the light of US trade tariffs, wars and crude oil prices falling as a result, all of which pushed CPO prices in the same direction.
RHB Bank Singapore is keeping a 'buy' call with a lower target price of $1.70 from $1.85 previously.
The Singapore research group says: "We expect 2026 to be a more balanced year fundamentally, with lower y-o-y crude palm oil (CPO) prices, but geopolitical risks will translate to more volatility. We lower our CPO, but raise our palm kernel (PK) price assumptions for FY2025-FY2027. We expect the full impact of the consolidation of Austindo Nusantara Jaya (ANJ) to come in from 2H2025, providing a growth impetus for the group. The stock is currently trading at 8x FY26F P/E, at the mid-end of its peer range of 6-11x."
