DFI Retail Group has announced a positive outlook for its earnings recovery in the upcoming financial year, following the divestment of its Singapore food business. The company, which is maintaining a “buy” recommendation with a new target price of $3.03, anticipates a 30% upside and a forecasted yield of approximately 5% for the financial year 2025. This strategic move is expected to alleviate the long-term earnings drag previously experienced by the group.
The decision to divest is seen as a step towards enhancing the company’s overall valuation, with the stock currently trading at an attractive 13 times the forecasted price-to-earnings ratio for 2025. The dividend yield remains appealing, bolstered by the parent company, Jardine Matheson Holdings, which traditionally uplifts dividends back to the group level.
Analyst Alfie Yeo expressed confidence in the group’s trajectory, stating, “We remain positive on DFI Retail Group’s earnings recovery expectations and attractive valuation.” This optimism is underpinned by the company’s strategic decisions aimed at streamlining operations and focusing on core areas of growth.
The anticipated recovery in earnings is significant for investors, as it signals a potential turnaround in the group’s financial performance. The move is also expected to enhance shareholder value through improved dividend yields and a stronger market position. As DFI Retail Group navigates these changes, the market will be closely watching its performance in the coming year.
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