KUALA LUMPUR (Feb 22): CIMB IB Research has downgraded Sime Darby Bhd to “Reduce” at RM2.73 with a lower target price of RM2.42 (from RM10.22) and said it was resuming coverage of Sime Darby, which is now a global trading and logistics player, after the spin-off of its plantation and property segments via a demerger.

In a note Feb 21, the research house said Sime stands to benefit from higher coal prices, as well as the Asia Pacific’s growth.

“However, we believe the share price already reflects its improving earnings prospects.

“The stock trades at FY18-19F P/E of 21-22x, which is above our estimated KLCI’s FY18F P/E of 17x.

“We downgrade the stock to Reduce from Add with a lower target price of RM2.42,” it said.