Thai Union Public Company Limited (SET: TU), Thailand’s frozen and canned seafood exporter, is on a four-day losing streak as analysts start to cut target price over its concerns on rising material costs.
Kiatnakin Phatra Securities (KKPS) downgraded TU to Underperform from Neutral and cut target price to THB 14.00 from THB 18.00 per share, reflecting its changes in earnings forecast.
KKPS expected TU’s earnings to fall by 19% in 2023 before resuming growth again in 2024, while stating that the new forecast is 22% below consensus for 2023. Share price is expected to remain under pressure as consensus continues to be revised down.
Net profit in 1Q23 is expected to be THB 600 million (-66% YoY, -52% QoQ) due to a high base, revenue is expected to fall by 10% YoY, while GPM is expected to decrease to 15% in 1Q23 due to the faster rise in tuna prices.
The outlook by KKPS aligns with the target price in Refinitiv that is trending downward. Even though 10 out of 13 brokers maintain “BUY” recommendations on the Thai canned seafood exporter, consensus target price has been trimmed down from THB 22.55, THB 21.99, THB 21.42 and THB 19.61 per share from January to April this year. The Latest review from Innovest X Securities and Maybank recommended traders to “Hold”.
TU closed the morning session at THB 13.90 per share, decreased THB 0.20 or 1.42%. The share price is -5.44% since closing at THB 14.70 per share on March 28.