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Investing.com - Nomura/Instinet downgraded Hartalega (KLSE:HART) stock from Buy to Neutral on Wednesday, while significantly reducing its price target to MYR1.31 from MYR2.64.
The downgrade comes as the investment firm cited ongoing pricing pressure in non-US markets and uncertainty around average selling price recovery in US markets, leading to substantial cuts in earnings forecasts.
Nomura slashed its earnings per share estimates for Hartalega by 40% for FY26, 28% for FY27, and 20% for FY28, while also applying a lower FY26 target price-to-earnings ratio of 27x, down from 33x previously.
The new price target of MYR1.31 implies a 1% downside from current levels, though Nomura noted that Hartalega’s net assets per share of MYR1.27 should help limit further downside following recent share price weakness.
Hartalega currently trades at 27.3x FY26 estimated earnings per share of MYR0.048, with Nomura identifying potential implementation of US tariffs on Chinese gloves as an upside risk that could improve the economics of Malaysian glove manufacturers.
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