In a report released today, Jason Sum from DBS maintained a Buy rating on ST Engineering (SGGKF – Research Report), with a price target of S$5.40.
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Jason Sum has given his Buy rating due to a combination of factors that highlight ST Engineering’s strong position and growth potential. The company is strategically positioned to capitalize on global trends such as digitalization, urbanization, sustainability, and security, which are expected to drive demand for its diverse range of services and products. ST Engineering’s focus on research and development, along with strategic acquisitions, supports its expansion in key areas like smart city solutions, digital businesses, and international defense contracts.
Moreover, the company’s robust order backlog of SGD26.9 billion as of September 2024 provides strong earnings visibility, with a projected double-digit earnings compound annual growth rate (CAGR) over the medium term. This growth is anticipated to be fueled by both organic expansion and contributions from recent acquisitions, along with improved operating margins. Despite its strong performance in 2024, ST Engineering’s valuations remain attractive, suggesting potential for a re-rating as the company continues to execute its growth strategy effectively.
In another report released on February 6, CGS-CIMB also reiterated a Buy rating on the stock with a S$5.30 price target.