PETALING JAYA: Johor Plantations Group Bhd
’s weaker‑than‑expected first quarter results for financial year 2026 (1Q26) have prompted several brokerages to cut their earnings forecasts.
Analysts flagged continued exposure to higher interest, increased external fresh fruit bunch (FFB) purchases and elevated unit costs.
Hong Leong Investment Bank (HLIB) Research said core earnings of RM45.6mil came in below expectations, representing only 13.6% to 13.8% of consensus and its full‑year estimates, due to a lower‑than‑expected realised price premium and higher finance costs.
“We cut our FY26 core earnings forecast by 9.9%, mainly to account for lower price premiums and higher net interest expense assumptions,” it said. However, HLIB Research raised its financial year 2027 (FY27) to FY28 core earnings forecasts by 2.3% to 7% to reflect expected contributions from the downstream segment.
It maintained a “buy” call with a lower target price of RM1.78.
RHB Research said it expects FFB production to recover in 2Q26 on the back of improved weather, while crude palm oil (CPO) prices should also be higher.
It trimmed earnings by 12.2%, 3.7% and 4% for FY26, FY27 and FY28, respectively, but kept its “buy” rating with a reduced target price of RM1.90.
“We believe this is justified, given its robust environmental, social and governance credentials, which support higher average selling prices and promising downstream prospects starting operations in July 2026,” RHB Research said.
Phillip Securities Research attributed the sequential weakness to lower FFB, CPO and palm kernel output and sales volumes, alongside softer average selling prices for palm products.
It cut its 2026 to 2028 earnings per share forecasts by 9% to 13% after factoring in higher operating costs, maintaining a “hold” call with a lower target price of RM1.75, down from RM1.92.
“Current valuations appear to have largely priced in Johor Plantations’ strengths, in our view, against a backdrop of higher operating costs, downstream gestation losses and sizeable capital expenditure commitments,” it said, adding that key risks include production fluctuations, palm product price volatility, rising cost pressures and regulatory uncertainties.
CIMB Research, meanwhile, expects stronger CPO prices and output to lift performance in the coming quarters.
It projected FFB production to rise 13% to 15% quarter‑on‑quarter in 2Q26, while the average April 2026 Malaysian Palm Oil Board CPO price of RM4,567 per tonne was 10% above the 1Q26 average.
CIMB Research maintained its earnings forecast with a “hold” call and an unchanged target price of RM1.91, supported by a 4.3% dividend yield.
An analyst from a bank‑backed research house said overall earnings are expected to strengthen over the coming quarters, supported by higher CPO prices and seasonally stronger output.
Key catalysts include higher‑than‑expected CPO prices and stronger production recovery, while risks include higher costs, adverse weather and lower‑than‑expected FFB yields due to accelerated replanting.
