OCBC Investment Research upgraded ComfortDelGro Corp Ltd
to 'buy' from 'hold' and raised its target price to
S$1.90 from S$1.60, citing better prospects for the transport
operator in 2013.
ComfortDelGro shares were up 1.15 percent at S$1.76 on
Wednesday. The stock has gained 24 percent this year,
outperforming the 18 percent gain in the broader Straits Times
ComfortDelGro's bus operations in Singapore are seen turning
around gradually in fiscal year 2013 on the back of the Bus
Services Enhancement Programme (BSEP) and its related subsidies,
as well as the likelihood of a fare hike, OCBC said.
Under BSEP, the Singapore government is partnering with bus
operators to increase bus capacity and improve services.
Fuel prices are likely to remain subdued in 2013 and with
substantial hedges in place, ComfortDelGro is well-positioned to
benefit from any additional dips, OCBC said.
The Downtown Line project in Singapore is expected to boost
ComfortDelGro's ridership, OCBC said, adding that acquisitions
and strategic moves overseas will allow the company to continue
enjoying stable revenue and operating profit contributions.
1020 (0220 GMT)