CIMB Investment Bank Bhd (CIMB Securities) and Hong Leong Investment Bank Bhd (HLIB) maintain HOLD on Petronas Gas with target prices of RM17.83 and RM18.70 respectively.
The research houses note that earnings remained broadly in line to slightly below expectations as tariff-led gains were offset by higher costs and depreciation.
Petronas Gas Bhd’s 1QFY26 performance came in mixed as higher regulated tariffs supported revenue but cost pressures weighed on profitability.
Core earnings fell 6.5% year-on-year despite a 26.6% quarter-on-quarter rebound, with analysts noting that results tracked broadly in line with expectations at about a quarter of full-year forecasts.
Revenue edged down 0.6% year-on-year as gas transportation income rose 13.3% on higher Peninsular Gas Utilisation tariffs while regasification revenue increased 6.4% on new LNG storage services and tariff revisions.
However, utilities revenue dropped 13.1% due to lower electricity tariffs and weaker fuel gas prices, while gas processing remained stable.
At the earnings level, gas transportation EBIT fell 7.8% year-on-year and gas processing declined 9.7% due to higher maintenance and depreciation. Regasification provided some support with a 9.2% gain while utilities rose 2.1% on lower fuel costs.
Analysts said the mixed segment performance reflected ongoing cost normalisation after a stronger prior quarter.
Dividend was steady at 16 sen per share, which analysts viewed as in line with expectations and supportive of yield stability at around 4.1%.
CIMB noted that revisions to forecasts were minor, lifting FY26 to FY27 estimates by 1% to 2% while trimming FY28 to reflect a delay in a project commercial start date.
Looking ahead, analysts said earnings should remain stable with modest growth supported by tariff resets under the RP3 framework, new infrastructure projects and easing fuel costs, although risks remain from higher operating expenses and project timing shifts.
As of 10.37 am, the stock price dips 2.71% to RM17.24.
