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<Research>M Stanley Trims SINOPEC CORP (00386.HK) TP to $5, Rates Overweight
Recommend 13 Positive 32 Negative 10 |
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In a research report, Morgan Stanley cut its net profit forecasts on SINOPEC CORP (00386.HK) for FY24/FY25/FY26 by 4%, 7% and 6% respectively, taking into account the group's 1FQ24 results. The cut is mainly based on the broker's reduced EBIT forecasts on the group's E&P segment and refining segment, reflecting the YoY decline in natural gas prices and the impact of high crude oil prices respectively. Morgan expected SINOPEC's downstream business to remain weak, but also believed the market has priced in the weakness. Moreover, downstream capital expenditure has already peaked, and the company may increase capacity more stringently in the medium term. At the same time, the broker considered SINOPEC's earnings and dividend payout ratios to be less volatile than those of its peers, and it has a good track record of maximising shareholder returns. Summing up the above factors, Morgan Stanley trimmed its target price for SINOPEC from $5.21 to $5 and rated the company Overweight. AAStocks Financial News |
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