Iggy's Journal: Phillip Cuts ComfortDelGro's Target to $1.21. The Taxi Business Is the Reason Why
28 August 2026, AM
Analyst Rating:
Phillip Securities kept its NEUTRAL call on ComfortDelGro, cutting FY2026 earnings estimates by 7% to S$177 million and lowering its DCF target price to S$1.21 from S$1.35. The core argument: a structurally declining taxi business is outweighing genuine progress in UK public transport.
1H26 revenue and PATMI came in at only 46% and 44% of Phillip's full-year forecasts. Underlying PATMI fell 14.3% year on year to S$84.8 million. Taxi EBIT dropped 46% year on year to S$36.6 million, with Singapore's taxi fleet shrinking by roughly 400 vehicles a year, Australian demand soft against ride-hailing competition, and the UK A2B premium-taxi arm hit after a major Middle Eastern airline customer cut flights. Phillip sees no second-half recovery here. The offset is London buses, Metroline's contract repricing to higher margins is about 70% complete and lifted UK public-transport earnings 11% in 1H26. The interim dividend was held flat at 3.91 cents. Phillip's read is that the roughly S$850 million in acquisitions haven't yet produced a clear earnings turnaround, and near-term catalysts aren't strong enough to justify a more positive rating.
Just Reporting:
Worth being precise about what's converging here and what isn't. Phillip's caution is an earnings and DCF story, taxi decline outweighing the UK bus improvement. My own Zone 4 call on this name has never rested on the taxi business at all, it's a single hard gate on gearing, 37.9%, breaching my 35% ceiling by 2.9 points, with yield and coverage both passing comfortably. Two different analysts, two different reasons, landing on the same caution. That's worth noting rather than treating as one confirming the other, since if the taxi business stabilizes, my own gearing concern doesn't go away with it.
Iggy's Forensic Zone: Zone 4
Not financial advice. Iggy's Forensic Compliance Standards apply.
Cheers, Iggy 🦖