Singapore Airlines: Hold Rating Maintained Amid Core Profit Weakness and Dividend Concerns

SIA – Singapore Airlines (SINGF – Research Report), the Industrials sector company, was revisited by a Wall Street analyst today. Analyst Roy Chen from UOB Kay Hian maintained a Hold rating on the stock and has a S$6.63 price target.

Roy Chen’s rating is based on a combination of factors that reflect both positive and negative aspects of Singapore Airlines’ financial performance. The headline net profit for the fourth quarter of FY25 was S$410 million, which aligned with expectations. However, this figure was significantly bolstered by a one-time reversal of tax overprovision, which suggests that the underlying core profitability was weaker than anticipated.
Despite the favorable impact of lower fuel prices, the airline’s core net profit fell short of projections due to higher-than-expected non-fuel costs. Additionally, the sustainability of the current dividend level is questionable, given the anticipated negative contributions from its associate, Air India, in FY26. These elements together led to the decision to maintain a Hold rating, with a target price of S$6.63.

According to TipRanks, Chen is a 3-star analyst with an average return of 9.1% and a 62.50% success rate. Chen covers the Industrials sector, focusing on stocks such as ST Engineering, SIA – Singapore Airlines, and Cathay Pacific Airways.

In another report released on May 16, DBS also maintained a Hold rating on the stock with a S$6.30 price target.