OCBC downgraded DBS to Hold from Buy despite first-quarter earnings beating consensus forecasts, following a more than 13 percent rally over a one-month period.
“Lock in some profits now,” OCBC said in a note Tuesday, pointing to little upside to its S$29.18 fair value.
It advised buying the shares at S$27.50 or lower.
OCBC added that DBS’ first-quarter results surprised on the upside.
DBS reported Monday its first quarter net profit rose 9 percent on-year to S$1.65 billion as higher interest rates boosted its net interest margin and on strong growth in corporate loans.
OCBC noted that DBS management expected net interest margins will improve this year.
“We expect fee income to pick up this year as better market outlook and activities will usher in more IPOs and corporate actions,” OCBC said.
Shares of DBS ended Tuesday down 0.53 percent at S$28.25; Singapore markets were closed Wednesday for the Labour Day holiday.