Analyst Sachin Mittal from DBS maintained a Buy rating on NetLink NBN (NETLF – Research Report) and keeping the price target at S$0.98.
Sachin Mittal has given his Buy rating due to a combination of factors including NetLink NBN Trust’s strong market position and financial stability. The company holds a monopoly in Singapore’s fiber network, which provides it with a resilient business model supported by predictable revenue streams. This stability is further reinforced by a strong balance sheet and liquidity levels that ensure stable cash flows, supporting future capital expenditures and distributions.
Moreover, despite inflationary pressures, the company’s distributions are not expected to be significantly impacted due to the Regulated Asset Base model. The yield spread of NetLink NBN is attractive compared to historical averages, and the distribution per unit is anticipated to grow by 1-2% annually. These factors, combined with a target price of SGD0.98 and a projected narrowing of the yield spread, underpin Mittal’s Buy recommendation.
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