KUALA LUMPUR (May 16): Dialog Group Bhd’s (KL:DIALOG) stock fell on Friday, snapping a six-day winning streak, following a set of weaker than expected quarterly results by the oil and gas services firm. 

Net profit for the nine-months ended March 2025 accounted for less than two-thirds of the consensus full-year estimates, prompting analysts to cut their earnings forecasts and target prices. Still, most maintained their bullish calls, as Dialog now appears to be on the recovery path.

Dialog’s downstream segment has returned to the black and is expected to “continue its upward trajectory, buoyed by its growing plant maintenance project pipeline and potential write backs of its previous lumpy provisions,” said Hong Leong Investment Bank.

Shares of Dialog Group fell as much as 12 sen or 6.8% to RM1.65. Dialog Group was trading at RM1.68, after more than three million shares changed hands as of 9.15am. At the last price, the company had a market capitalisation of RM9.5 billion.

While Dialog has rebounded from recent decade-lows, investors are still nursing a near 10% year-to-date loss in the stock, following an unexpected quarterly loss announced in February, as well as April’s market tariff turmoil.

Dialog currently has 10 “buy” calls out of 15 analysts covering the stock, with the remaining five rating the stock “hold”. The average target price is RM2.26, according to Bloomberg, implying a potential return of up to 34% in the next 12 months.

“In our view, Dialog would need to win new, sizeable tank terminal contracts to re-rate its share price, as this would further enhance its recurring income portfolio,” said Maybank Investment Bank, noting that recurring income portfolio accounts for about 55% of Dialog’s core net profit.

The tank business, which has been resilient so far, could get a boost as storage demand typically improves in a weaker crude oil price environment, Kenanga Investment Bank added.

Crude oil prices have been falling since the start of 2025, amid concerns that international trade tensions and ensuing weakened global economic growth will sap demand. Brent, the global benchmark for crude oil, has fallen over 20% year-to-date.

Read also:
Dialog's 3Q profit drops 14% as revenue skids to over three-year low