ST Engineering’s Strong Financial Performance and Strategic Positioning Drive Buy Rating

Paul Chew, an analyst from Phillip Securities, maintained the Buy rating on ST Engineering (SGGKF – Research Report). The associated price target was raised to S$8.20.

Paul Chew has given his Buy rating due to a combination of factors including ST Engineering’s robust financial performance and strategic positioning. The company’s revenue for the first quarter of 2025 met expectations, with significant growth driven by the defense sector, which saw an 18% year-over-year increase. Additionally, new orders surged by 45% year-over-year, boosting the outstanding order book by 8% to S$29.8 billion.
Furthermore, the company’s increased terminal growth forecast and raised discounted cash flow target price to S$8.20 reflect optimism about future earnings potential. The structural uplift in defense spending due to global security concerns, combined with ST Engineering’s expanding capabilities in commercial aerospace and urban solutions, supports this positive outlook. Despite some challenges in the passenger-to-freighter segment, the overall demand for defense and public security solutions remains strong, particularly in key overseas markets like the Middle East and Europe.

In another report released on May 9, J.P. Morgan also maintained a Buy rating on the stock with a S$8.60 price target.