Singapore Airlines: Navigating Cost Pressures and Growth Challenges with a Hold Rating

DBS analyst Jason Sum has maintained their neutral stance on SINGF stock, giving a Hold rating on May 19.

Jason Sum’s rating is based on a combination of factors that influence Singapore Airlines’ current and future financial performance. The airline reported a significant drop in operating profit for the fourth quarter of FY25, missing market expectations due to increased cost pressures. This has led to a downward revision of earnings forecasts for FY26 and FY27, as the company faces challenges such as slower capacity growth, lower cargo volumes, and higher operating costs.
Despite these challenges, Singapore Airlines benefits from its strong position in Asia’s aviation hub and its extensive network, which helps capture transit traffic. The company is also investing in premiumization efforts to enhance its pricing power. However, ongoing margin pressures from lower yields and higher costs, alongside fair valuations compared to peers, suggest a balanced risk-to-reward profile. Consequently, Jason Sum has maintained a Hold rating with a slightly revised target price, reflecting these mixed prospects.

In another report released on May 19, UOB Kay Hian also maintained a Hold rating on the stock with a S$6.63 price target.