PETALING JAYA: Analysts are adjusting downwards Johor Plantations Group Bhd
’s earnings for the financial year 2026 (FY26), FY27 and FY28 to reflect lower fresh fruit bunch (FFB) growth, lower average selling price premium over Malaysian Palm Oil Board’s reference price and potential downstream segment losses.
The planter’s latest second quarter of FY26 (2Q26) core earnings of RM45.8mil took the first half of the year’s (1H26) total sum to RM91.4mil, which fell short of market expectations mainly due to lower-than-expected FFB output.
Hong Leong Investment Bank (HLIB) Research trimmed Johor Plantations’ FY26 to FY27 core earnings by 15% and 7.7%, while CIMB Research cut its FY26 to FY28 earnings by 13% and 22%, respectively.
RHB Research also adjusted the group’s FY26 earnings down by 14.5%, but raised its FY27 and FY28 earnings by 5% and 2.8%, respectively.
HLIB Research lowered the group’s core earnings, mainly to reflect lower FFB yield assumptions. The research house added that this will be partly offset by higher average crude palm oil (CPO) price assumptions following its earlier sector-wide upward revisions.
Following its earnings revisions and the roll-forward of the valuation base year (from 2026 to 2027), HLIB Research maintained the stock’s target price (TP) at RM1.78, based on 15 times the revised 2027 core earnings per share of 11.8 sen.
However, the research house downgraded the planter to a “hold” from “buy” earlier, stating that “we believe its recent price outperformance has run ahead of fundamentals”.
RHB Research, meanwhile, said it has kept a “buy” call on Johor Plantations with a higher TP of RM2.20 (up from RM1.90), implying an 8% upside with about 4% FY27 yield forecasts.
“We expect 2H26 FFB production to recover in line with the seasonal production peak.
“The CPO prices should improve quarter-on-quarter which is a positive given Johor Plantations’ high sensitivity to CPO price movements,” the research house said.
It has imputed updated FY27 to FY28 CPO price assumptions of RM4,500 to RM4,400 per tonne from RM4,300 previously, alongside its latest in-house foreign- exchange assumptions.
In a note to clients, CIMB Research said it cut Johor Plantations’ FY26 to FY28 earnings forecasts by 13% to 22%, after lowering its FFB production assumptions by around 10%.
This reflects accelerated replanting, biological tree stress reducing 1H26 yields, and the impact of dry weather in 1Q26.
However, the downgrades are partly offset by a RM50 per tonne increase in FY26 to FY27 CPO price assumptions.
“We now forecast Johor Plantations’ FFB production to decline 10% in FY26 and remain broadly flat in FY2 to FY28,” the research house said.
Its revised forecast projects core net profit to recover to RM175mil in 2H26, supported by seasonally stronger FFB output, lower unit costs and firmer CPO prices.
Hence, CIMB Research raised the stock’s TP by two sen to RM1.93, reflecting the potential for stronger CPO prices amid tighter supply.
It also maintained a “hold” call on Johor Plantations as near-term share price performance could be constrained by the 1H26 earnings miss and potential start-up losses at its first integrated sustainable palm oil complex.
