Maybank KimEng cut its forecasts for Venture after its first-quarter earnings disappointed, but it stuck with a Buy call.
“We continue to believe that VMS has multifaceted growth drivers and see the recent correction as an even more attractive opportunity to Buy,” it said in a note on Thursday.
It called Venture’s S$83.7 million first-quarter net profit “very respectable,” even though it missed its estimate of S$90 million on the weaker U.S. dollar against the Singapore dollar.
Maybank KimEng cut its 2018-20 earnings per share (EPS) estimates by 7-9 percent after the results, while it lowered its target price to S$28.83 from S$31.20, based on 3.4 times price-to-book value, down from 3.7 times previously.
“We think the current depressed share price offers an attractive buying opportunity,” it said.
The stock was down 10.72 percent at S$20.15 at 10:10 A.M. SGT, totting up an around 30 percent drop since the April 19 close at S$28.82.
Analysts were pointing to tobacco giant Philip Morris’ results last week as the reason for the decline. Those results showed that its device, IQOS, which heats but doesn’t burn tobacco, added only 3 percentage points to cigarette volumes, halving the growth rate of the previous quarter, Marketwatch reported last week. Those results had sent Philip Morris shares down as much as 17 percent on the day. Venture is believed to be a manufacturer of the device.