SIA – Singapore Airlines (SINGF – Research Report), the Industrials sector company, was revisited by a Wall Street analyst on February 21. Analyst Raymond Yap from CGS-CIMB reiterated a Hold rating on the stock and has a S$6.00 price target.
Raymond Yap’s rating is based on a combination of factors that provide a balanced outlook for Singapore Airlines. The company’s recent financial performance has been strong, with a core net profit that aligns with expectations, despite a seasonally weaker fourth quarter being anticipated. However, the net profit for the third quarter was slightly below preview estimates, affected by higher non-fuel costs and a small fuel hedging loss. The airline’s yields have outperformed expectations, but there are concerns about increased costs and potential challenges in the upcoming quarter.
Despite these concerns, Yap maintains a Hold rating, considering the potential for a significant dividend payout from the sale of Vistara as a supportive factor. While there are downside risks, such as rising jet fuel prices and potential impacts from geopolitical factors, the company’s strong cash position post-COVID-19 offers some upside potential. Yap expects the company to declare a larger-than-normal final dividend, which could provide an attractive yield to shareholders. Overall, the Hold rating reflects a cautious optimism, balancing the positive financial outlook with the uncertainties ahead.
In another report released on February 21, DBS also maintained a Hold rating on the stock with a S$6.00 price target.
SINGF’s price has also changed slightly for the past six months – from $4.675 to $4.700, which is a 0.53% increase.