“[Singtel] offers a combination of cash-flow generation from its developed market portfolio in Australia and Singapore, and growth elements through its emerging-market exposure in Indonesia, India, Thailand and the Philippines,” the analysts write in their Dec 8 report.
They also like that the telco has potential for a strategic review of its various assets which could help to crystallise value.
In addition, the group’s strong cash flow along its $9 billion asset divestment programme allows for a sustainable dividend yield of 5% on top of its share buyback programme.
While Singtel’s yield has compressed to 4% following its recent share price increase, the analysts like the telco’s double-digit earnings growth going into FY2027/2028, which they deem as “compelling” and better than the market’s performance.
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Pineda and Hilado also expect capital flows from the equity market development programme (EQDP) to support the telco with recent mandates encompassing the MSCI Singapore and FTSE all share indices, which are still dominated by large-cap names.
Furthermore, a potential consolidation in the market for Singtel’s Singapore business, which dragged profit growth, could catalyse market repair in 2026.
Pineda and Hilado’s new target price is based on a sum-of-the-parts (SOTP) formula which values Singtel’s Singapore and Australian businesses at 99 cents per share after factoring in net debt and its associates at $4.09 per share.
The analysts also have a bullish target of $5.34, which reflects a 10% increase in Bharti’s target price, lower India adjusted gross revenue (AGR) dues, and better average revenue per user (ARPU) and subscriber momentum for Bharti.
In a bearish scenario, the analysts target Singtel’s shares to reach $3.93, based on assumptions of a stronger Singapore dollar (SGD) against regional currencies and a 30% lower target price for Bharti.
At this point, Singtel’s recent share price correction from its $4.90 peak allows for “better value” on the stock.
“Concerns on potential Australia-related fines due to network outages may be mitigated by capital management activities and liquidity driven inflow,” the analysts write.
Shares in Singtel closed 2 cents lower or 0.44% down at $4.56 on Dec 8.
