KUALA LUMPUR: RHB Bank Bhd has an upside potential of 11.1 per cent or a target price of RM6, premised on its attractive valuations and ongoing transformation programme, said Hong Leong Investment Bank (HLIB).
The research firm said the bank’s price earnings ratio is 22 per cent lower against industry’s 12.4 times and price to book ratio is 32 per cent discount against peers’ 1.37 times.
“The expected benefits from its ongoing transformation programme and the end of impairment reinforce our projected FY17-19 earnings per share compound annual growth rate of 14 per cent,” it said in a note.
HLIB said RHB Bank shares have been gyrating within its upward channel.
“Following the double bottom formation and strong breakout above neckline resistance near RM5.29 (21 Sep high) coupled with closing above key multiple simple moving average, we are positive that the share prices could stage a follow-through rally towards RM5.51 (27 Feb high),” it said.
“A strong breakout above RM5.51 will spur prices to test 52-week high at RM5.61 (2 Feb) before reaching our LT objective at RM5.87 (double bottom breakout measurement).”