26/05/2012 (Bernama) - Three research houses have recommended a 'neutral' call on Kuala Lumpur Kepong Bhd (KLK) shares due to the slower growth expectation of the company.

Alliance Research said it might revised KLK's crude palm oil (CPO) average selling price by up to RM150 per metric tonne from current estimation of RM3,050.

"We will also be reviewing our estimates for the manufacturing segment after further clarification with the management on margin trends going forward," it said in a note Friday.

It said price competition for downstream products with Indonesian players was likely to persist in the interim unless there was a response to the lower export duties put in place in Indonesia.

"We do note, however, that plantation earnings in the third quarter of financial year 2012 (FY12) and fourth quarter FY12 are expected to be stronger due to seasonality as well as marginally higher CPO average selling price," it said.

Alliance Research has maintained a 'neutral' call on KLK with a target price of RM21.70.