Singapore Airlines (SIA) has been downgraded to a “sell” recommendation by Maybank IBG Research following a significant drop in its first-quarter net profit for the financial year 2026. The airline reported a 58.8% year-on-year decline in net profit, amounting to $136 million (SGD186 million), which represents only 12% of the full-year forecasts by Maybank and other analysts. The downturn is attributed to reduced interest income and losses from associates, particularly Air India.
Maybank analyst Eric Ong noted that the airline’s share price has outpaced its fundamentals, leading to the downgrade. The target price has been adjusted to $4.93 (SGD6.75), down from $5.55 (SGD7.60), based on a price-to-book ratio of 1.25 times for FY26 estimates. Ong also highlighted the impact of rising non-fuel costs and a weaker cargo business on the company’s earnings, prompting a reduction in core earnings per share estimates by 25-29% for FY26-28.
The downgrade comes amidst a challenging environment for SIA, as it navigates increased operational costs and fluctuating demand in the aviation sector. The airline’s financial performance is under scrutiny as it attempts to balance cost management with strategic growth initiatives. The revised outlook suggests a cautious approach for investors, with Maybank advising a reassessment of SIA’s long-term prospects in light of current market conditions.
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