by winston » Thu Jan 17, 2013 11:43 am
not vested
STOCKS NEWS SINGAPORE-JPMorgan downgrades Golden Agri to 'underweight'
J.P. Morgan downgraded palm oil firm Golden Agri-Resources Ltd to 'underweight' from 'neutral' and lowered its target price to S$0.50 from S$0.56, on expectations it will be hurt by a muted recovery in crude palm oil (CPO) prices.
By 0329 GMT, shares of Golden Agri were down 3.1 percent at S$0.62, and have fallen about 4.6 percent since the start of the year, compared to the Straits Times Index's <.FTSTI> 1 percent rise.
J.P. Morgan said it expects Golden Agri's fourth-quarter earnings to miss expectations, and forecast a 20 percent quarter-on-quarter decline in core net profit to $69 million as average CPO prices fell 23 percent in the period.
It also cut its 2013 and 2014 earnings per share estimates by 10 percent to factor in lower CPO prices.
Indonesian plantation companies, including Golden Agri, are expected to see meaningful labor cost increase following this year's rise in minimum wage, the brokerage said.
Source: Reuters
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