DJ MARKET TALK: Morgan Stanley Raises UOB Target To S$23.00 (2010/03/01 12:00PM)
0400 GMT [Dow Jones] STOCK CALL: Morgan Stanley raises UOB (U11.SG) target price to S$23.00 from S$21.00 on earnings forecast revisions, roll forward of valuation year following 4Q09 results. Broker says bank''s 4Q09 net profit missed broker''s own forecast due to higher-than-expected operating expenses and lower fees; trims FY10 net profit forecast by 4.1%, but raises FY11 net profit forecast by 8.1%. Says new target price assumes "base case" scenario of continued improvement in asset quality, some net interest margin compression with sustained low interest rates and loan growth. Maintains Overweight rating, says UOB remains preferred bank exposure in Singapore; "UOB offers better value, higher returns, more growth, superior earnings quality, the strongest balance sheet, and it has the least to do to generate performance." Shares down 0.9% at S$18.48 (STI +0.8%).