Maybank Kim Eng downgraded Singapore Press Holdings Ltd (SPH) to "hold" from "buy" and cut its target price to S$4.50 from S$4.52, saying the media and property company's core business has continued to weaken.
SPH shares were down 1.15 per cent at S$4.28 on Tuesday, while the benchmark Straits Times Index was up 0.4 per cent.
The stock has risen about 6 per cent so far this year versus a more than 2 per cent gain in the index.
SPH reported on Monday evening an 81 per cent jump in third-quarter net profit to S$187.5 million, lifted by S$111.4 million fair value gain on investment properties resulting from a change in accounting policy.
Excluding the fair value gain on investment properties and an impairment loss of S$15.6 million on an overseas magazine subsidiary, SPH's core net profit of S$91.7 million was down 12 per cent from a year earlier, Maybank noted.
The broker also said SPH's advertising revenue has been heavily hit for the last two quarters since Singapore launched cooling measures on the property and car sectors.
"The most immediate catalyst, REIT spin-off, is largely in price already while the core media business could continue to be under pressure for more quarters," Maybank said, adding that the current 5.5 per cent dividend yield would be less attractive as government bond yields rise.