JPMorgan Raises OR Target Price to THB26 with Recovery in Oil Consumption and Non-Oil Business

According to JP Morgan’s analysis, it increased PTT Oil and Retail Business Public Company Limited’s share to an overweight rating with an upside of 23% to the new target price of BHT 26 from BHT 21.

The upgrade came with the recovery of Thailand’s tourism and the THB 14 billion investment budget for expanding Café Amazon branches and bringing bottled coffee into the country’s seven-eleven minimart. Moreover, the security firm believes the company’s Q1/23 budget will be profitable with the marketing margin bounced strongly at BHT 1.80-1.85 per liter compared to last quarter’s margin at BHT 1.30 per litre.

According to Mr. Disathat Panyarachun, Chief Executive Officer of PTT Oil and Retail Public Company, the company has set an investment budget of 31,197 million baht. The investment will focus on strengthening the Lifestyle Business Group’s Value Chain. Furthermore, THB 14,193 million baht, or roughly 45% of the budget, is set aside for Café Amazon and Texas Chicken restaurant expansion.

According to Kasikorn Securities, JPM’s overweight recommendation on OR shares, as well as a growth in oil service consumption and a rise in marketing margin, is a favorable element for their 2023 financial results. However, the first-quarter earnings are predicted to grow by (ten to fifteen percent) 10% to 15% over last year. Kasikorn’s target price is THB 25.50. Furthermore, the company’s collaboration with Boonrawd Brewery in making three different kinds of coffee bottles is projected to be beneficial. However, because it is new, it will be reevaluated.

And from Yuanta Securities perspective, OR’s performance in Q1/2023 will improve compared to Q4/2022 due to an increase in marketing margins and the restoration of refineries to full capacity. However, due to the large base last year, performance is likely to fall when compared to the same time this year