Phillip Securities analyst Paul Chew maintained a Hold rating on ST Engineering today and set a price target of S$8.20.
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Paul Chew has given his Hold rating due to a combination of factors influencing ST Engineering’s current financial standing and future prospects. The company’s revenue for the first nine months of 2025 was in line with expectations, with notable growth in commercial aerospace revenue. However, the impairment of the iDirect satellite communications business, largely due to goodwill and intangibles, has been a significant setback, impacting the company’s overall financial health.
Despite a robust order book and strong momentum in defense spending, the valuation at 30 times PE for FY25e already reflects anticipated near-term growth, suggesting limited upside potential. The disposal of the loss-making iDirect division is expected to alleviate some earnings and cash-flow pressures, but the competitive landscape, particularly with Starlink’s advancements, poses ongoing challenges. Consequently, the recommendation remains neutral, reflecting a balanced view of the company’s strengths and challenges.
Chew covers the Industrials sector, focusing on stocks such as ST Engineering, Keppel Corporation Limited, and SIA – Singapore Airlines. According to TipRanks, Chew has an average return of 21.7% and a 68.78% success rate on recommended stocks.