SATS: Expanded Global Cargo Platform Supports Earnings Visibility but Fully Valued, Justifying Hold Rating

Phillip Securities analyst Hashim Osman downgraded the rating on SATS to a Hold today, setting a price target of S$3.84.

Hashim Osman has given his Hold rating due to a combination of factors tied to SATS’ expanding global footprint and balanced risk-reward profile. Following the integration of Worldwide Flight Services (WFS), SATS has evolved into a broad-based cargo handling platform, winning network-wide mandates across the US, Europe, and the Middle East, which significantly increases its overseas revenue share. These multi-year, multi-station contracts, including recent agreements with carriers such as Riyadh Air, Turkish Airlines, and Saudia Cargo, provide solid visibility on future earnings and support a modest upward revision to FY26 profit forecasts.

At the same time, Osman views the current valuation as largely reflecting these positive developments, justifying a neutral stance rather than an outright Buy. While the anticipated impact from the removal of the De Minimis exemption in the US is now seen as less disruptive, SATS still operates in a volatile trade environment that could pressure volumes in certain routes. The resilience of the cargo business, aided by rising demand for US domestic freight and ongoing contract wins, underpins earnings stability but does not yet present a sufficiently compelling upside to warrant a more aggressive recommendation. Consequently, a Hold rating, paired with a slightly higher target price, captures both the improved growth platform and the remaining operational and macro uncertainties.