UOB Kay Hian Research has reaffirmed its ‘buy’ recommendation for ComfortDelGro Corporation, maintaining a target price of $1.70, reflecting an 11.1% upside from its current share price of $1.53. The research firm noted that ComfortDelGro’s first half of 2025 core profit after tax and minority interests was $99m, a 7% year-on-year increase, though slightly below expectations due to softer UK margins.
ComfortDelGro’s revenue for the first half rose to $2.4b, driven by strategic acquisitions such as Addison Lee and A2B, as well as UK bus contract renewals. The company declared an 11% increase in its interim dividend to 3.91 Singapore cents per share, maintaining an 80% payout ratio.
The public transport segment showed strength, particularly in the UK, with revenue up 4% year-on-year. The taxi and private hire segment saw a 59% increase in revenue, although quarterly growth eased due to competitive pressures. Other private transport services benefited from the acquisition of CMAC, with revenue rising 11% year-on-year in the second quarter.
Looking ahead, UOB Kay Hian anticipates stronger performance in the second half of 2025, supported by Singapore rail revenue growth and UK bus contract renewals. The firm has adjusted its core PATMI forecasts for 2025 to 2027, citing lower-than-expected UK margins, but remains optimistic about the stock’s potential backed by a 5.5% dividend yield.
“`
