In its research note, AmResearch said despite GAB's still positive earnings prospects and higher fair value of RM8.62 a share, it offers limited upside potential and valuation is no longer attractive.
"Moving forward, we anticipate another decent year for GAB with earnings over the next several quarters buoyed by the spillover effects of the World Cup event and steady malt liquor market growth of 3 per cent to 5 per cent," the firm said.
GAB's frothy dividend yields of 5 per cent-6 per cent is attractive, it added.
AmResearch has not changed its 2011-2013 full-year earnings forecast with a three-year compounded average growth rate of 4 per cent.
"At current stock price, our dividend forecasts as premised on a payout ratio of 89 per cent translate to attractive yields of 5 per cent-6 per cent."
AmResearch said key risk to its forecast is a hike in excise duty which would damper industry growth prospects.
"Our 2011-2013 earnings forecast is underpinned by GAB's strong product portfolio and steady malt liquor market growth of 3 per cent to 5 per cent a year while dividend yields of 5 per cent to 6 per cent is well supported by its strong balance sheet."
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