Singtel has announced expectations for high single-digit growth in its core earnings before interest and taxes (EBIT) for the financial year 2026, driven by $200m in cost savings. This growth is projected to continue into 2027, supported by a surge in data-centre contributions and a rebound in mobile revenue. The company has also increased its dividend per share forecast for 2026 and 2027 by 3% and 2%, respectively, due to a higher payout ratio and value realisation dividends. Consequently, Singtel has maintained a “BUY” recommendation with an increased target price of S$4.40.
The report highlights the strategic focus on enhancing profitability and shareholder returns. Singtel’s management is confident in achieving these targets through operational efficiencies and market recovery. The emphasis on data-centre growth aligns with global trends towards digital infrastructure, positioning Singtel favourably in the telecommunications sector.
In the broader industry context, Singapore Real Estate Investment Trusts (REITs) are also experiencing positive developments. The easing of interest cost risks and improved operational performance in the first quarter of 2025 have bolstered the sector. REIT managers are transitioning to cash-based management fees, which, despite reducing headline yields to 5.6% from 6.1%, remain attractive compared to other markets. Large-cap REITs like MPACT, MLT, and MINT, alongside “alpha-opportunities” in Elite and ESR REIT, offer sustainable yields between 7% and 10%.
These strategic shifts in both Singtel and the REIT sector underscore a broader trend towards sustainable growth and value realisation, promising robust returns for investors in the coming years.
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