Kenneth TAN, an analyst from CGS-CIMB, reiterated the Buy rating on Singtel (SNGNF – Research Report). The associated price target is S$3.70.
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Kenneth TAN has given his Buy rating due to a combination of factors influencing Singtel’s financial prospects. Firstly, there is an anticipated increase in the EBIT growth guidance for FY25, moving from low double-digit to mid-to-high teens, as cost-cutting measures have been notably effective. This improvement is expected to be driven by significant margin growth in Optus and stronger contributions from associates, which have already resulted in a robust core net profit increase.
Furthermore, Singtel’s dividend prospects are bolstered by a more favorable free cash flow outlook and a substantial asset monetization pipeline estimated at around S$12 billion. The company is positioned to provide attractive yields in the coming fiscal years, which are likely to appeal to investors. Additionally, the operational improvements at Optus, including margin expansions due to strategic price hikes and cost reductions, further enhance the positive outlook for Singtel. These factors collectively underpin TAN’s confidence in the company’s ability to improve its return on invested capital, leading to his Buy recommendation.
In another report released on January 21, UOB Kay Hian also maintained a Buy rating on the stock with a S$3.58 price target.