CGS International analyst Prem Jearajasingam downgraded the rating on StarHub to a Sell on February 14, setting a price target of S$0.87.
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Prem Jearajasingam has given his Sell rating due to a combination of factors linked to weakening earnings and heightened execution risk. StarHub’s latest results significantly undershot expectations, driven by ongoing deterioration in its consumer segments, while management’s outlook points to EBITDA falling to roughly three-quarters of FY25 levels as the company spends heavily to reshape its business.
Although these measures are intended to improve long-term competitiveness, particularly by expanding the enterprise segment and pushing premium digital services, they entail a sharp near-term profit contraction, with FY26 net income expected to slump and only return to FY25 levels around FY28. The reduced target price, higher assumed cost of equity, and limited dividend support relative to the earnings decline together lead Jearajasingam to see more downside than upside in the stock over the next year, justifying the downgrade to a Sell stance.