KUALA LUMPUR (Oct 24): Gamuda Bhd shares retreated 0.42% in early trade this morning after CIMB IB Research maintained its “Reduce” rating on the stock at RM2.38 with a lower target price of RM2.18 (from RM3.05) and said MRT 2’s underground (UG) contract cost renegotiation will resume despite a termination order by the MOF.

At 9.10am, Gamuda fell 1 sen to RM2.37 with 597,000 shares traded.

In a note Oct 23,the research house said Gamuda will end up being a price taker.

“We expect the outcome of MRT 2 UG cost reduction to be net negative to Gamuda. We cut FY19-21F EPS by 8-11% (23-60% cut in MRT 2 scope).

“Low job termination risk and retention of MRT contract look largely priced in (+15% off its multi-year low). Reiterate Reduce with lower RM2.18 target price,” it said.