STOCKS NEWS SINGAPORE-Genting shares drop, brokers cut target prices
Shares in Genting Singapore Plc fell to a 27-month low after it posted weak third-quarter results, prompting analysts to cut their target prices or downgrade ratings on the casino operator.
By 0118 GMT, Genting Singapore shares were flat at S$1.235, recovering from an intraday low of S$1.20. Since the start of the year, they have fallen 18.5 percent, compared with a 12.9 percent gain in the Straits Times Index.
Genting Singapore, which owns one of Singapore's two multi-billion-dollar casino complexes, said on Monday its third-quarter core earnings fell 19 percent to S$303.2 million from a year ago.
CIMB Research downgraded Genting Singapore to 'neutral' from 'outperform' and cut its target price to S$1.20 from S$1.60, citing worse-than-expected quarterly earnings due to rising costs and weak gaming revenue.
"We previously believed that the poor second-quarter results were one-off but it does look like the business is going through a difficult transition," said CIMB in a report.
The brokerage is cutting its earnings per share forecast for Genting Singapore in 2012 by 15 percent, to reflect additional pre-opening costs for the rest of Resorts World Sentosa's theme park.
RHB Research cut its target price on Genting Singapore to S$1.15 from S$1.20 and maintained its 'underperform' rating, citing a lower-than-expected EBITDA margin of 45.9 percent in the third quarter and poor VIP win rate of 2.8 percent in the same period, compared with 3.2 percent a year ago.
0923 (0123 GMT)