UOB Kay Hian analyst Roy Chen downgraded the rating on SATS (SPASF – Research Report) to a Hold yesterday, setting a price target of S$2.89.
Roy Chen has given his Hold rating due to a combination of factors impacting SATS. The ongoing tariff war initiated by the US has introduced significant uncertainties in global trade, which could negatively affect SATS’s operations, particularly in the air cargo handling business. Given that SATS derives a substantial portion of its revenue from global and US air cargo operations, the potential decline in global trade volume poses a risk to its financial performance.
The imposition of new tariffs and the removal of tax exemptions for air cargo from China and Hong Kong further complicate the outlook for SATS. These developments have led to a revision of SATS’s air cargo volume and earnings projections, with anticipated reductions in both areas. Consequently, the combination of these uncertainties and potential financial impacts has led to the decision to downgrade SATS to a Hold rating, with a target price set at S$2.89.
According to TipRanks, Chen is a 3-star analyst with an average return of 4.1% and a 53.13% success rate. Chen covers the Industrials sector, focusing on stocks such as ST Engineering, Cathay Pacific Airways, and COSCO SHIPPING Ports.