Jardine Matheson S-E Asia downgraded to ‘underperform’ by Macquarie; counter closes 7.7% lower
Research house lowers its 12-month target price by 10% to S$23.50 from S$26
Macquarie Equity Research has downgraded Jardine Matheson Southeast Asia (JMSEA) to "underperform" from "neutral", lowering its 12-month target price by 10% to S$23.50 from S$26. The stock dipped 6.6% or S$1.92 to S$27.38 during Wednesday's trading session. The downgrade comes as the stock trades near an all-time-high NAV premium of 31%, a valuation deemed unjustified by Macquarie.
The research house estimated that an 8% NAV is warranted to account for Indonesian withholding tax, affecting subsidiary Astra's dividends and overheads. JMSEA's recent share price surge was driven by investors positioning for a special distribution, equivalent to around US$0.70 a share at the current price, representing a 3.1% yield.
With JMSEA set to trade ex-dividend on Thursday, the broker anticipates a reversal in the company's share price trajectory. The downgrade also reflects the expected sale of JMSEA's Cycle & Carriage unit, slated for completion in Q1 2027, and a 0.5% stake distribution in Toyota Motor. Macquarie believes that paying a large NAV premium would be detrimental to JM shareholders and suggests that JMSEA may distribute other parts of its portfolio in specie to its shareholders for simplification.
Written by urgent.news from The Business Times - Companies & Markets's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
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