ComfortDelGro (C52): Stock Surge Amid Mixed Financials—Can Momentum Hold?

The stock of ComfortDelGro Corporation Limited (SGX:C52) has climbed steadily in early 2025, rising 9.3% year-to-date and outperforming regional peers. Yet beneath the surface, the company’s financials reveal a nuanced picture: robust revenue growth contrasts with an earnings-per-share (EPS) shortfall, while technical indicators hint at potential resistance. Investors now face a critical question: Can this momentum persist, or will underlying risks curb the rally?

Financial Performance: Growth, but with a Catch

ComfortDelGro’s FY2024 results underscore its resilience. Revenue surged 15% to S$4.48 billion, driven by demand across its transport segments, including public buses, taxis, and automotive services. Net profit rose 17% to S$210.5 million, aligning with expectations. However, the EPS of S$0.097 fell short of estimates by 1.1%, signaling execution challenges in translating top-line growth to bottom-line gains.

Analysts project 11% annual EPS growth over the next three years, but this hinges on Q1 2025 results—still unreported as of April 2025. The company’s upcoming Q2 earnings release on August 12, 2025, will be pivotal, as it will include Q1 data. Until then, investors must rely on historical trends and sector dynamics.

Stock Momentum: Bulls vs. Technical Resistance

The stock’s recent gains—up 4.2% in April , closing at S$1.48 on April 17—are buoyed by a 5.29% dividend yield and analyst optimism. The trailing P/E of 15.23x, while higher than Singapore’s market average, reflects confidence in ComfortDelGro’s earnings trajectory. However, technical analysts flag risks:

• The stock trades +1.6% above its 200-day moving average, suggesting bullish momentum, but faces resistance near its 52-week high of S$1.49.
• A bearish bear flag pattern on weekly charts warns of a potential pullback, exacerbated by a beta of 0.45—indicating lower volatility than the broader market but limited upside potential in rallies.

Risks and Caution Flags

1. Valuation Concerns: The P/E premium may outpace earnings growth. With a projected 11% EPS growth rate, the current valuation leaves little room for error.
2. Dividend Sustainability: While the dividend yield is attractive, the payout ratio of 76% leaves limited flexibility for reinvestment.
3. Sector Dynamics: Analysts forecast only 3.9% annual revenue growth for ComfortDelGro over the next three years—slightly below the Asia Transportation sector’s 4.0% average.

Conclusion: A Balanced Outlook

ComfortDelGro’s stock rally reflects investor faith in its dividend stability and diversified operations, which include public transport and automotive services. However, the EPS miss in FY2024 and pending Q1 results create uncertainty.

Key Data Points:
- Analysts’ consensus target of S$1.64 implies a 16% upside from April’s closing price, but this assumes execution beats expectations.
- The company’s ROE of 8.5% and historical net income growth of 6.9% over five years lag behind the sector’s 22% average, suggesting room for improvement.

The stock’s strong 9.3% annual return and outperformance of regional indices justify cautious optimism, but risks remain. Investors should prioritize:
1. Waiting for Q2 earnings (August 12, 2025) to confirm Q1 resilience.
2. Monitoring technical resistance near S$1.49 and sector volatility.
3. Evaluating dividend sustainability amid a 76% payout ratio.

In short, ComfortDelGro’s momentum is real, but its durability depends on closing the gap between revenue growth and EPS delivery. Until then, the stock remains a hold for income-focused investors with a long-term horizon, but caution is warranted for those seeking rapid capital gains.