Singtel: Hold Rating Amid Asset Recycling Targets and Valuation Constraints

Kenneth TAN, an analyst from CGS-CIMB, reiterated the Hold rating on Singtel (SNGNF – Research Report). The associated price target is S$4.10.

Kenneth TAN’s rating is based on a combination of factors that influence Singtel’s financial outlook. One of the key considerations is Singtel’s asset recycling target, which has been increased to S$9 billion. This target supports the company’s ability to maintain attractive dividend yields of over 5% through FY28, providing a steady income stream for investors. However, the valuation of Singtel at a CY26F P/E of 21.6x is significantly above its historical trading range, which limits the potential for share price appreciation unless there is substantial asset value realization.
Another factor contributing to the Hold rating is the company’s strategic focus on optimizing its balance sheet through value realization dividends and a share buyback program. While these initiatives are positive, the management’s cautious approach to reducing core associate stakes suggests limited opportunities for further monetization beyond the current asset recycling plan. Additionally, the potential risks such as currency fluctuations, competitive pressures, and regulatory changes in key markets also play a role in maintaining a cautious outlook. Therefore, while the dividend yield provides downside support, the valuation constraints and external risks justify the Hold recommendation.

According to TipRanks, TAN is a 5-star analyst with an average return of 39.1% and an 87.50% success rate.