Analysts raise target prices, dividend estimates on DBS, predicting higher valuation ahead

ANALYSTS raised their target prices for DBS after the lender posted full-year net profit that reached a record high. This was pointing to potentially higher valuations and the bank dishing out more dividends ahead.

Maybank Securities raised its target price for DBS by nearly 10 per cent to S$51.37 from S$46.91, with a “buy” rating. RHB maintained its “buy” rating and raised its target price by nearly 15 per cent to S$51.20 from S$44.70 on Tuesday. 

Maybank said that DBS is giving significant visibility on capital returns.

While earnings could grow at just 1 per cent compound annual growth rate between FY2025 and FY2027, dividends could expand at 7 per cent, delivering yields higher than 6.5 per cent, it said.

Maybank upgraded its estimate for dividends per share (DPS) by 14 to 22 per cent between FY2025 and FY2027.

“The group’s capital returns policies should deliver dividend yields more than 6.5 per cent. All this justifies a higher valuation, in our view,” it said.