KUALA LUMPUR: Research firms continue to favour CIMB Group Holdings Bhd (CIMB) following its strong first quarter of financial year 2023 (1QFY2023) performance, coupled with its current inexpensive valuation.
In a note today, Kenanga Investment Bank Bhd (Kenanga) said that CIMB's 1Q2023 net profit of RM1.65 billion was within expectations.
"The group has made headways to record double-digit return on equity (ROE) performance and has built channels to help sustain earnings performance across its key regions.
"CIMB's return to double-digit ROE could be indicative of its prospects, led by better forward earnings growth (11 per cent versus the industry average of 4.0 per cent) while offering attractive dividend yields of around 6.0 per cent in the medium-term," it said.
As such, Kenanga maintains its 'outperform' call on CIMB, with a target price of RM6.55 per share.
Meanwhile, Hong Leong Investment Bank Bhd (HLIB) noted that CIMB's 1Q2023 performance was backed by positive income and a lower effective tax rate.
"In our view, the recent share price slump has tilted its risk-reward profile to be more favourable.
"As such, we now find CIMB's valuations inexpensive and it offers a good yield of 6.0 per cent," it said in a note today.
As such, HLIB has upgraded its call on CIMB to 'buy', with an unchanged target price of RM5.85.
At 12.17 pm, CIMB shares rose by four sen to RM4.82 with 8.06 million shares transacted.