Nomura Equity Research cut its target price on PT Gudang Garam
Tbk to 65,000 rupiah from 67,500 rupiah, citing
concerns about the cigarette maker's ability to raise average
"We see strong growth in Gudang Garam's 'mild' product,
bringing higher overall volume growth for the company going
forward, but the change in the product mix may lead to
lower-than-expected operating profit margin," Nomura said in a
note on Monday.
The research house kept its 'buy' rating as it expects
margin recovery to drive strong earnings growth in full-year
"We believe the mild segment will continue to grow within
Indonesia's cigarette industry so a stronger foothold in the
segment is positive for Gudang Garam."
Shares of Gudang Garam were down 1.39 percent at 49,800
rupiah, while the broader index was down 0.33 percent.
1045 (0345 GMT)
(Reporting by Andjarsari Paramaditha; Editing by Subhranshu