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On Thursday, JPMorgan analysts upgraded Public Bank Bhd (PBK:MK) (OTC:PBLOF) stock rating from Neutral to Overweight and raised the price target to MYR5.30 from the previous MYR4.80. The revised price target reflects a positive outlook on the bank’s future earnings potential.
The upgrade follows Public Bank’s first-quarter results, indicating a consistent and steady growth in core profits. Analysts at JPMorgan anticipate that the bank will outperform market expectations for its 2025/26 profits. They attribute this to the bank’s advantageous position to deliver better-than-expected financial outcomes.
Public Bank’s stock has experienced limited movement over the past twelve months, largely due to the impact of a shareholder stake sale. This event led to an approximate 10-15% decrease in the stock’s valuation. However, JPMorgan analysts believe that the bank’s consistent returns and its ability to leverage its capital base should warrant higher valuation multiples.
The upgraded price target of MYR5.30, set for June 2026, is derived from a two-stage dividend discount model. This model takes into account the bank’s expected future dividends, suggesting a more optimistic valuation than the previous target set for December 2025.
In summary, JPMorgan’s revised outlook on Public Bank is based on the financial institution’s strong quarterly performance and its potential to surpass current market projections for the coming years. The bank’s readiness to utilize its capital effectively is also seen as a key factor in driving its share value upwards.
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