DBS analyst Lim Rui Wen has maintained their bullish stance on UOVEF stock, giving a Buy rating on February 21.
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Lim Rui Wen has given his Buy rating due to a combination of factors including UOB’s strategic acquisition of Citigroup’s consumer businesses in key ASEAN markets, which is expected to enhance its franchise and drive higher structural return on equity (ROE) beyond 13% by FY26. The integration of these acquisitions is progressing well, leveraging a larger customer base of approximately 8.5 million, which is anticipated to generate long-term synergies.
Additionally, UOB’s capital management strategy, which includes a SGD3 billion package to return surplus capital over three years through special dividends and share buybacks, is seen as a positive move. This strategy, combined with expected high-single-digit loan growth and double-digit fee income growth, is projected to bolster earnings in FY25. Despite potential risks such as asset quality concerns and macroeconomic uncertainties, the strong provisions buffer and a forward dividend yield of approximately 5.4% provide a solid support for the stock, justifying the Buy rating.
According to TipRanks, Rui Wen is a 4-star analyst with an average return of 11.9% and a 76.19% success rate. Rui Wen covers the Financial sector, focusing on stocks such as Bank of America, Citigroup, and Icici Bank.
In another report released on February 21, Phillip Securities also maintained a Buy rating on the stock with a S$41.80 price target.