KUALA LUMPUR (Jan 27): CIMB Research has upgraded Felda Global Ventures Holdings Bhd (FGV) to “Hold” (from Reduce) at RM2.20 with a lower target price of RM2.33 (from RM2.93) and said it sees limited downside for the stock from current levels, with the market already valuing its plantation estates at below the replacement cost of new planting.

In a note Jan 26, the research house said FGV’s move to sell non-core assets will help improve sentiment.

However, it said the stock was unlikely to rerate significantly as 4Q’s earnings are likely to remain weak and could come in below consensus.

“On top of this, the stock may lose its position in the FBM KLCI due to its lower market capitalisation.

“We cut our FY14-16 earnings by 4-7% to reflect the losses from the floods and Asian Plantations, and lower our SOP-based target price by 20%,” it said.