Analyst Sachin Mittal of DBS maintained a Buy rating on Singtel (SNGNF – Research Report), retaining the price target of S$4.40.
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Sachin Mittal has given his Buy rating due to a combination of factors including Singtel’s anticipated growth in core earnings before interest and taxes (EBIT) driven by significant cost savings and increased contributions from data centers. The company is also expected to see a recovery in mobile revenue, which supports the forecast for high-single-digit growth in core EBIT for the fiscal years 2026 and 2027. Additionally, the decision to raise the dividend per share reflects a higher payout ratio and value realization, further enhancing investor appeal.
Singtel’s geographical diversification, with significant stakes in telecom associates across India, Indonesia, the Philippines, and Thailand, contributes substantially to its operating profit. This diversification, alongside the narrowing of the holding company discount from 27% to a potential 10-15%, underpins the positive outlook. The discount has been reduced due to improved core operating profit, rising exposure to high-valuation data centers, and strategic divestments. Potential catalysts such as increased investment in the core business and possible market consolidation in Singapore also support the Buy recommendation.
In another report released on May 26, Phillip Securities also maintained a Buy rating on the stock with a S$4.40 price target.