RHB Research, which has a "buy" call on the stock, raised its earnings assumption due to the lower risk of further store closures.
Its target price was raised to RM3.50 from RM3.25, which reflects a FY22 forecast price-earnings of 13.6x, which is about the five-year average.
"We believe current price levels are attractive, and foresee the potential for valuations to be re-rated back to mean or above when investors rotate into cyclical sectors more meaningfully.
"Essentially, the recovery trope is still intact despite the recent resurgence in cases – as vaccination progress is underway – as well as the fact that the re-imposition of movement restrictions is being done in a targeted manner as opposed to a blanket nationwide lockdown," said RHB in a note.
The research house rolled forward its valuations to FY22 as it believes investors should look beyond the near-term earnings risk arising from the spike in infection rates of late and focus on the eventual cyclical recovery.