KUALA LUMPUR: Analysts are keeping their "buy" calls on Gamuda Bhd
following the group's latest results announcement and guidance for a stronger second half to the financial year.
In Wednesday's results filing with the stock exchange, Gamuda said its net profit for the six-month period ended Jan 31, 2024, saw an increase of 19% to RM404mil, while revenue nearly doubled to RM6.2bil compared to the previous year’s RM3.7bil.
Hong Leong Investment Bank (HLIB) Research maintained its target price at RM5.93 while affirming optimism over the group's prospects.
It said earnings are expected to pick up in the coming quarters as domestic construction scale up while lumpy property recognition comes in.
Meanwhile, it noted multiple jobs in the pipeline with Australian shortlisted projects growing. Domestically, prospects on the Penang Light Rail Transit remained encouraging while the data centre pipeline provides robust visibility stretching five to eight years.
"Despite earnings coming in within, we cut FY24f/25f earnings by 3.1% and 0.8% but increase FY26 forecasts by 3.6% after adjusting for award delays," said the research firm.
In its own report, TA Securities Research maintained its FY25-26 earnings forecasts post-results and adjusted its target price higher to RM6.18 from RM5.55.
"We deem the results within our expectations as we anticipate stronger 2HFY24 earnings driven by lumpy recognition of overseas projects upon completion," it said.
The research firm added that it expects Gamuda to achieve substantial earnings growth in 2HFY24 compared to 1HFY24, due to its resilient outstanding order book and strong backlog of unbilled property sales.
RHB Research, meanwhile, slashed its earnings projection for FY24-26 by 4-5% as it dialled down optimism over Gamuda's construction billings progress.
Consequently, it revised lower its target price to RM6.30 from RM6.46 previously.
"A rerating catalyst would be faster-than-expected wins for local and overseas jobs, particularly for MRT3, and renewable energy projects in Australia," it added.
Kenanga Research raised its target price to RM6.20 from RM5.45 as it rolled over its valuation base year to FY25.
"We continue to like Gamuda for being the frontrunner for the Bayan Lepas LRT and the tunnelling job for the MRT3, its ability to secure new jobs in overseas markets, its strong war chest after the disposal of its toll highways, its strong earnings visibility underpinned by a record outstanding order book of RM26.1bil, and its inroads into the renewable energy space," it said.
