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KUALA LUMPUR (June 26): Gamuda Bhd (KL:GAMUDA) outperformed on Friday as investors shrugged off a weaker-than-expected quarter at the construction and property development firm.
Analysts, meanwhile, are cutting target prices even as they continue to advocate buying into Gamuda on bets that profits will pick up in the coming quarters, with higher progress billings from major construction projects and as margins improve with lower input costs.
“We expect earnings to accelerate from 2027 onwards,” said Hong Leong Investment Bank in trimming its target price to RM5.27. “Also, we believe fears over the Iran war-driven margin erosion are overdone.”
Gamuda rose as much as six sen or 1.4% to RM4.31, bucking a broader market decline on Friday. The stock is off this year’s lows during the Iran war selldown, but down over 12% on a year-to-date basis after an interrupted bull run since 2022.
The stock still enjoys near-unanimous “buy” recommendations among 22 research houses tracked by Bloomberg. Only CLSA rates the stock “hold” and there are no “sell” calls. The average target prices is down slightly to RM5.33, implying potential upside of nearly 24% from current prices.
“Prospects are supported by Gamuda’s robust outstanding construction order book” of RM52.3 billion, Public Investment Bank said. The job pipeline remains “encouraging” with an estimated RM20 billion in new wins expected by December, the house noted.
Further, Public Investment expects the outlook for Gamuda’s property segment to improve after weaker than expected sales, as the company is set to launch eight key projects worth about RM10 billion over the next 12 months across Vietnam, Singapore, and Malaysia.
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