Singtel, one of Singapore’s leading telecommunications companies, is projected to see its core value rise by 180% over the next few years, according to a recent DBS Group Research report. The anticipated growth is attributed to a 10% compound annual growth rate (CAGR) in earnings from the financial year 2025 to 2028, with significant contributions from Optus, NCS, and data centre operations.
Despite a 62% increase in Singtel’s associate value since 2017, the company’s stock has remained flat due to an 80% decline in its core value in Singapore and Australia. However, analysts are optimistic about a turnaround, expecting a price-to-earnings re-rating from 6.6 times to 18.5 times.
The report recommends a “BUY” rating for Singtel, with a target price of $3.35 (S$4.58). It suggests that the market is likely to reward Singtel for its efforts to enhance its core business. Potential catalysts for this growth include increased investment in core operations and possible consolidation within Singapore.
Singtel’s strategic focus on strengthening its core sectors is seen as a pivotal move to regain investor confidence and drive future growth. The company’s ability to leverage its key business areas is expected to play a crucial role in achieving the projected increase in core value.
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