Phillip Securities analyst Paul Chew has maintained their bullish stance on SGGKF stock, giving a Buy rating today.
Paul Chew has given his Buy rating due to a combination of factors that highlight ST Engineering’s robust financial performance and promising growth prospects. The company’s FY24 revenue and adjusted PATMI met expectations, with a notable 32% year-over-year increase in the second half, driven by strong performance in the commercial aerospace sector. This growth is attributed to improved margins, operating leverage, and a favorable product mix, alongside a healthy order book valued at S$28.5 billion.
Furthermore, the company is well-positioned to benefit from rising global travel and increased demand for aircraft maintenance, as well as the anticipated growth in engine nacelle production due to improved A320 neo deliveries. The defense sector is also expected to see a boost from heightened geopolitical tensions and increased defense budgets, particularly in Singapore, where a 12% year-over-year increase is projected for 2025. These factors, combined with an upward revision of long-term growth assumptions and a raised DCF target price, underpin the Buy recommendation.
In another report released today, DBS also maintained a Buy rating on the stock with a S$6.00 price target.