SD Guthrie on track for stronger earnings in 2026 as CPO prices stay elevated — analysts
08/05/2026 (The Edge Malaysia), Kuala Lumpur - SD Guthrie Bhd (KL:SDG), the world’s largest listed palm oil producer by planted acreage, is likely to post stronger earnings for the rest of 2026 as elevated crude palm oil (CPO) prices support its upstream plantation business, according to analysts.
Despite reporting a flattish core net profit of RM548 million for the first quarter ended March 31, 2026 (1QFY2026), SD Guthrie's results still came in within expectation at 25% of consensus estimation, as analysts noted that the opening quarter is typically the weakest production period of the year for the group.
“We expect stronger sequential earnings in 2QFY2026, driven by a quarter-on-quarter increase in fresh fruit bunch production and stronger CPO prices, partly offset by elevated fertiliser and diesel costs,” CIMB Securities said in a note on Friday. This comes as higher biodiesel demand and geopolitical tensions in the Middle East continue to support palm oil prices.
Production is also expected to recover from the second quarter onwards, with output weighted more heavily towards the second half of the year. The group expects 43% of annual production in the first half of 2026 and 57% in the second half.
SD Guthrie has also increased its forward sales position with about 60% of its Malaysian production for the third quarter of 2026 having been hedged, while around one-third of fourth-quarter production has been secured at average prices of RM4,400 to RM4,500 per tonne, according to CIMB Securities.
While fertiliser costs were flagged as a main concern for the sector, CIMB Securities said SD Guthrie has already secured its fertiliser supply for FY2026, with prices rising by only 1% to 3%.
“Suppliers in Indonesia have also committed to delivery, reducing the risk of material second-half supply disruption,” the research houses said, adding that by the first quarter, the group had completed about 17% of its annual fertiliser application programme in Malaysia, 21% in Indonesia and 14% in Papua New Guinea.
While off highs, shares in SD Guthrie have risen about 8.5% year to date, supported by improving sentiment towards plantation stocks as elevated edible oil prices and stronger sector returns revive interest in expansion opportunities.
Bloomberg data showed that 16 out of 19 research houses covering the stock currently maintain “buy” calls, while the remaining three recommend “hold”. The consensus 12-month target price stands at RM6.96, implying a potential upside of about 11% from the stock’s current price of RM6.23.
Kenanga said SD Guthrie remains attractive due to its undervalued land bank and efforts to unlock value from its assets. However, the research house noted that major long-term expansion plans may take a back seat over the next two to three years as the group prioritises higher dividend payouts and debt reduction.
The group’s efforts to improve productivity are also expected to take time to fully materialise, given the scale of its plantation operations spanning about 703,000 hectares.