CIMB Investment Bank Bhd (CIMB Securities) and Hong Leong Investment Bank Bhd (HLIB) both maintained HOLD calls on Petronas Chemicals Group, with CIMB lifting its target price to RM5.45 from RM5.45 previously while HLIB trimmed its target price to RM5.63 from RM6.30.
Analysts said 1Q26 results were driven by stronger product spreads and higher selling prices but upside remains limited due to planned plant turnarounds and softer demand trends.
Petronas Chemicals Group returned to profitability in 1Q26, supported by firmer average selling prices across fertiliser and methanol products as well as improved spreads in olefins and derivatives following global supply disruptions.
CIMB Securities said earnings were boosted by better margins and stronger volumes, although part of the gains were offset by higher losses at its Pengerang operations and the impact of feedstock-related disruptions.
HLIB Research noted that core earnings rose strongly year on year and exceeded expectations, driven by higher utilisation rates, stronger sales volumes and improved pricing.
However, analysts said the recovery is still uneven across segments, with maintenance shutdowns and weaker utilisation expected to limit near-term upside.
CIMB Securities highlighted that utilisation rates are expected to dip in 2Q26 due to scheduled turnarounds at the Kertih Integrated Petrochemical Complex and ASEAN Bintulu Fertiliser plant, while selling prices have also softened from their recent peak as demand eases.
Despite this, both research houses said the group’s earnings outlook remains supported by stronger spreads compared to the previous quarter.
HLIB added that it raised earnings forecasts for FY26 and FY27 to reflect stronger pricing assumptions but maintained a cautious stance on valuation. CIMB Securities said it remains neutral on the stock, noting that a more positive view would depend on sustained industry-wide capacity rationalisation and longer-term improvement in supply-demand balance.
As of 10.35 am, the stock price roese 4.59% to RM5.70.
