HSBC analysts on Tuesday raised their earnings expectations for global trading and logistics group Li & Fung Ltd. , upgrading the stock to overweight from underweight.
They said that in the wake of last week’s quantitative easing by the U.S. Federal Reserve, Li & Fung’s earnings were expected to experience a similar revival as seen in 2008 and 2009, when earnings rose 32% and 22%, respectively, as U.S. retail sales recovered and retailers began restocking.
The bank raised the company’s earnings estimates by 6% to 10% for 2013-14, HSBC analyst Chris Zee wrote in the report. The bank forecasts Li & Fung’s earnings to grow 73.4% in 2013, which is in line with other analysts. HSBC also raised its target price to 17 Hong Kong dollars ($2.18). In Tuesday afternoon trading, Li & Fung shares were up 0.2% to $12.78.
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