Analysts raise Top Glove targets, keep sell or reduce ratings on oversupply

Shares climb in early trading despite bearish brokerage views

Three Malaysian-brokerage analysts raised their earnings forecasts and target prices for Top Glove on Oct. 7 after the glove maker’s fiscal 2026 results beat expectations. CIMB and Hong Leong kept sell or reduce ratings citing structural oversupply in the global glove industry and competition from Chinese manufacturers; Maybank maintained a sell rating, saying improved prospects were more than reflected in the share price after the recent rally. The simultaneous estimate upgrades and bearish calls point to a divergence between Top Glove’s near-term pricing recovery and the longer-running industry concerns that the analysts expect to keep margins under pressure.

CIMB Securities analyst Chun Sung Oong raised Top Glove’s FY2027-FY2028 core net profit estimates by 1% to 19% after the FY2026 beat, but kept a reduce rating on the stock. The brokerage lifted its target price to 0.70 ringgit from 0.63 ringgit, citing what Oong called an “unfavorable industry outlook” amid persistent global oversupply and intense competition from Chinese manufacturers. Oong said Top Glove’s earnings have likely peaked and could trend lower toward normalized levels in the coming quarters. He also flagged higher labor costs and a 39% increase in natural gas tariffs as headwinds. While glove prices could remain elevated, they had already eased from their June peak, Oong said. At the time of his note, Top Glove shares were 1.7% higher at 0.89 ringgit.

Hong Leong Investment Bank analyst Chee Kok Siang raised FY2027-FY2028 earnings estimates by 4.1% to 52.8%, saying pricing power is fading, natural gas costs are rising, and tax benefits are diminishing. Average selling prices are expected to decline from fourth-quarter FY2026 levels, which had been boosted by delayed shipments carrying higher May prices. Price increases in October and November may provide some support but are unlikely to drive margins as strongly as in recent quarters, Chee said, citing a more balanced supply of nitrile rubber. Hong Leong raised its target price to 0.73 ringgit from 0.68 ringgit and downgraded the stock to sell from hold on concerns over structural oversupply. Shares were 5.7% higher at 0.93 ringgit at the time of the note.

Maybank Investment Bank analyst Wong Wei Sum went further on the estimate revision, raising FY2027-FY2028 earnings estimates by 113% to 116%. Management has guided to a higher average selling prices trend for October and November as Chinese glove makers show “greater discipline” and demand and supply become more balanced, she said. Cost efficiencies should support sustainable pretax margins of around 8% to 12%, Wong added, though potential minimum-wage increases could raise production costs. Maybank raised its target price to 0.73 ringgit from 0.71 ringgit while maintaining a sell rating. Shares were 2.3% higher at 0.90 ringgit at the time of the note.

Maybank’s Wong Wei Sum concluded that Top Glove’s improved prospects were likely more than reflected in its share price following the recent rally. The bearish calls came as glove pricing, which had supported Top Glove’s fiscal 2026 earnings beat, showed signs of normalizing, with one analyst describing the supply of nitrile rubber as “more balanced.”