RHB Investment Bank Bhd (RHB Research) maintained its BUY call on Westports Holdings Bhd and raised its target price to RM7.49 from RM6.55, implying a 23.8% upside, as analyst expects stronger earnings supported by higher tariffs and container volume growth despite lingering geopolitical risks.
RHB Research expects Westports’ second quarter of 2026 core earnings to come in between RM280 million and RM320 million, representing a year-on-year growth of around 20% to 40%, as the port operator benefits from improved container charges and positive throughput growth.
The research house said higher fuel costs are largely priced in, with forecasts already factoring in a 30% increase in fuel expenses compared with pre-conflict levels. It added that fuel consumption is expected to ease by about 10% in the fourth quarter of 2026 following the deployment of 60 electric trucks by the third quarter of 2026.
RHB Research also highlighted Malaysia’s export outlook as a key growth driver for Westports, noting that exports expanded by 24.3% in the first five months of 2026. The research house believes sustained strength in the electrical and electronics sector could support stronger growth in container throughput.
While value-added services charges are expected to normalise after the January 2026 congestion issue was resolved, RHB Research said improving container volumes should offset the moderation. It maintained its full-year throughput growth forecast at 4.5%, within management’s low single-digit guidance.
The research house raised its FY26 to FY28 earnings forecasts by 6%, 4% and 4% respectively after increasing its FY26 tariff assumption to RM210 from RM198. The revised target price is based on a discounted cash flow valuation with a target FY27 price-to-earnings ratio of 19 times.
As of 9.59 am, the stock price slips 0.17% to RM6.04.
