DBS keeps 'buy' and $1.80 target price call on ComfortDelGro with overseas contribution seen to rev up

With recent acquisitions such as A2B, CMAC and Addison Lee, coupled with new addition bus contracts in the UK, along with contracts renewal at better margins other UK buses, these are expected to drive growth for the group going into FY2025. 

The growth overseas will help mitigate softer numbers expected from its taxi and point-to-point business here within Singapore, says DBS.

According to DBS, CDG is focused on charting its long-term profit trajectory by focusing on accretive M&A rather than growing for growth’s sake. 

"The counter offers growth, yield and value on the back of our projected 14% y-o-y increase in net profit, some 6% yield at 80% payout ratio; trading at around 13x PE, 1.2x PB with ROE projected to cross 9% in FY25," says DBS in its March 28 note, where it kept its "buy" call and $1.80 target price.

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ComfortDelGro shares changed hands at $1.45, down 1.36%, as at 4.32 pm.