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On Friday, CLSA analysts downgraded shares of PTT Public Company Limited (PTT:TB) (OTC: PTTPF) from ’Hold’ to ’Underperform’, adjusting the price target to THB26.00 from the previous THB29.50. The downgrade followed PTT’s fourth-quarter earnings report, which showed a net profit of Bt9.3 billion, equivalent to Bt0.32 per share. This figure represented a significant decline of 43% quarter-over-quarter and 72% year-over-year, falling short of market expectations by 45%.
Despite a robust Ebitda performance that saw a 35% increase from the previous quarter and a 6% rise from the same period last year, PTT’s bottom line suffered due to foreign exchange and derivative losses, coupled with provisions at its subsidiary PTTGC. The company’s earnings were impacted by these financial setbacks, which overshadowed the gains in Ebitda.
Analysts at CLSA have expressed concerns about the ongoing regulatory risks that PTT may face in the coming year. The Thai government’s efforts to reduce electricity tariffs are expected to continue, which could have adverse effects on PTT’s gas pipeline operations. This regulatory environment is a contributing factor to the firm’s decision to lower the stock’s price target and rating.
The revised price target of THB26.00, down from THB29.50, is based on a Sum of the Parts (SoTP) valuation method. The downgrade to ’Underperform’ reflects the analysts’ outlook on the stock, considering the recent earnings miss and the potential challenges ahead for the company.
The report from CLSA provides a clear view of PTT’s current financial health and the external factors that may influence its performance in the near future. The downgrade serves as an adjustment to the analysts’ expectations for the stock, aligning with the latest financial results and anticipated regulatory pressures.
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