KUALA LUMPUR: Shares in Top Glove Corp Bhd
are heading to a third day of straight losses after analysts, including those at UOBKayHian and MIDF Research downgraded the stock on earnings worries.
At 3.30pm, the stock was down 12 sen, or 2.1% at RM5.49 with more than four million shares changed hands.
“Despite the fact that raw materials price have slowly recovered from its peak back in February, we continue to be wary of the movements of currency as well as raw materials price which could have an adverse impact on its earnings,” MIDF Research said in a note to client today.
The firm has a target price of RM5 for Top Glove, valuing the stock at 18 times its projected earnings in financial year ending Aug 31, 2018 (FY18).
Top Glove released its third quarter results ended May 31 on Friday.
Core net profit during dropped 6.4% to RM77.7mil compared with the immediate past quarter despite a 2.1% increase in revenue to RM869.9mil.
The group’s performance was impacted by deferred purchases by certain customers and lower margin due to the higher latex input costs.
“Downgrade to hold with a lower target price of RM5.48, following the latest revision to our earnings forecasts and the 22% share price rally since early-May,” UOBKayHian said.