Astra International Target Price Raised to Rp 6,950 on Automotive Recovery and Foreign Inflow Support

JAKARTA, Investortrust.id — Shares of diversified conglomerate PT Astra International Tbk (ASII) have drawn renewed investor interest, underpinned by expanding operating margins across its automotive operations and an improved earnings outlook for its heavy-equipment subsidiary, PT United Tractors Tbk (UNTR). Resilient foreign ownership and well-contained net selling activity have further stabilized the stock.

The converging catalysts prompted BRI Danareksa Sekuritas to raise its target price on ASII to Rp 6,950 from Rp 6,850 per share while reiterating its Buy rating. The upward revision factors in higher valuation multiples across key operating subsidiaries and adjusted corporate earnings projections, chiefly driven by updated profit forecasts for UNTR.

The upward adjustment reflects a 5.3% increase in Astra's projected full-year 2026 net profit to Rp 29.1 trillion, elevated by UNTR’s strategic position as a core revenue driver for the group. However, the brokerage trimmed ASII's net profit forecasts for 2027 and 2028 by 2.1% and 5.2% to Rp 33.1 trillion and Rp 33.7 trillion, respectively.

BRI Danareksa Sekuritas equity analysts Erindra Krisnawan and Sabela Nur Amalina stated that UNTR will remain a pivotal profit driver for Astra through the fourth quarter of 2026 and into 2027, with automotive operations and financial services expected to maintain steady support.

Operational Margin Gains Across Automotive Units

A primary driver supporting the re-rating is the sequential improvement in Astra's automotive profitability during the third quarter of 2026. The turnaround was propelled by two-wheeler (2W) operations and automotive component manufacturing. Two-wheeler division profit advanced 18% year-on-year, while automotive component earnings surged 34% over the same period.

In four-wheeler (4W) distribution, operating margins expanded to 2.4% in the third quarter from 1.6% in the second quarter. The margin rebound was driven by tighter promotional discount discipline alongside higher revenue contributions from after-sales spare parts and servicing.

Rising domestic competition nevertheless continues to erode Astra's automobile market dominance. The company’s four-wheeler market share narrowed to 46.5% in the third quarter from 50.9% in the first half, pulling its nine-month cumulative market share down to 49.3%.

Balance Sheet Discipline and Downside Risks

Amid stiff automotive competition, BRI Danareksa Sekuritas noted that Astra remains supported by robust operating cash flows and disciplined capital allocation. The two-wheeler and financial services divisions are projected to deliver resilient earnings streams, even as the broader financial sector confronts asset-quality pressures.

Foreign investor positioning also remains an important pillar of support, with overseas institutional holdings demonstrating resilience relative to broader capital market outflows.

The brokerage cautioned, however, that investors must monitor key downside risks. These include further market share losses in passenger vehicles and potential foreign institutional selling should index compiler MSCI implement changes to Indonesia's market status.