PETALING JAYA: Analysts are cautiously optimistic on Genting Plantations Bhd
’s earnings recovery in the subsequent quarters given firmer crude palm oil (CPO) prices and positive production trajectory heading into the peak production cycle.
The company’s latest first quarter of the financial year 2026 (1Q26) core earnings of RM61.2mil, saw a 52.3% drop quarter-on-quarter and fell 49.5% year-on-year.
In a report, CIMB Research raised the company’s FY26 earnings forecast by 18% to reflect higher CPO price assumptions, partially offset by weaker property earnings and higher operating costs.
In fact, the research house expects stronger CPO prices and higher FFB production to support Genting Plantations’ earnings recovery in 2Q26.
CIMB Research maintained a “hold” call on the stock with an unchanged target price of RM5.68, which incorporates a 20% discount to its sum-of-parts valuation.
“The discount reflects ongoing regulatory risks in Indonesia, as well as execution risks related to Genting Plantations’ maiden property development venture in Indonesia,” it added.
To recap, Genting Plantations acquired two land parcels totalling 152ha in Jakarta for RM676mil for property development, despite having no operating track record in Indonesia’s property sector.
“In our view, the stock lacks near-term catalysts, as the positive impact from stronger CPO prices is offset by investor concerns over its Indonesia property exposure,” it pointed out.
UOB Kay Hian (UOBKH) Research expects Genting Plantations’ earnings to improve on firmer CPO prices despite 1Q26 results, which came in below expectations.
Furthermore, the company’s management maintained its FFB growth target of 3% to 5% y-o-y and cost guidance of RM2,500 per tonne, despite a projected 15% rise in fertiliser costs.
UOBKH Research has kept a “hold” call on the stock with a lower target price of RM5.44 from RM5.48 previously.
It said: “We believe Genting Plantations is fairly valued at the current valuation of 12 times price earnings given its moderate growth profile and large exposure (57% of planted area) to Indonesian operations.”
The research house also trimmed its 2026 earnings forecast for Genting Plantations by 5% after imputing lower sales contribution from the property segment due to deferred launches.
Meanwhile, Hong Leong Investment Bank (HLIB) Research described the 1Q26 results as a slow start for Genting Plantations.
“While we anticipate stronger palm product prices to lift performance in subsequent quarters, the results still came in below expectations due to lower-than-expected FFB output,” it pointed out.
The research house has lowered its FY26 core earnings forecast by 9.2%, mainly to account for a lower FFB output assumption.
“Post earnings revision and recalibration of earnings model following the release of the FY25 annual report, we maintain our buy rating on Genting Plantations with a lower target price of RM5.73.”
