Petronas Chemicals Expected 2Q Earnings Recovery May Boost Shares
Petronas Chemicals Expected 2Q Earnings Recovery
CGS International analyst Raymond Yap expects a sharp on-quarter recovery in Petronas Chemicals' 2Q earnings, which could be a key rerating catalyst for the stock.
Share Price Under Pressure
Yap notes that Petronas Chemicals' share price has come under pressure recently due to expectations that a potential reopening of the Strait of Hormuz could lower petrochemical selling prices and feedstock costs.
Additional Risks and Opportunities
Downside risks include larger-than-expected losses at its Kertih operations due to ongoing 2Q plant turnarounds. However, a potential disposal of its 50% stake in Pengerang Petrochemical Co. to Petronas could further support a rerating.
CGS maintains an add rating on Petronas Chemicals with a target price of 6.58 ringgit. Shares are 1.6% lower at 5.39 ringgit.
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