HLIB raises 2024 CPO price assumption to RM4,000/mt
24.10.2023 (The Edge Malaysia) - KUALA LUMPUR (Oct 24): Hong Leong Investment Bank (HLIB) Research has maintained its “neutral” rating on the plantation sector and said the current weakness in crude palm oil (CPO) price will likely be temporary (and recover from 2024), supported by favourable palm oil, gas oil (POGO) spread and heightened supply risk from El Nino.
In a sector update on Tuesday, the research house tweaked its 2023 CPO price assumption lower (by RM150) to RM3,850 per metric tonne (/mt), but raised 2024 CPO price assumption (by RM200) to RM4,000/mt.
“We will only adjust earnings forecasts, target prices (TPs) and ratings on individual planters (to reflect our new CPO price and FFB output assumptions) in the upcoming results season (starting from Nov 2023).
“For exposure, our top pick remains IOI Corp Bhd (“buy”; TP: RM4.66),” it said.