As the company is guiding for further earnings and dividend growth this year, analysts have stayed positive on this counter.
"We think StarHub is set for sustained earnings growth over FY2024-FY2026," write Kenneth Tan and Lim Siew Khee of CGS-CIMB in their Feb 8 note.
They have upgraded the stock from "hold" to "buy", along with a higher target price of $1.25 from $1.19 previously.
The telco is in the midst of a multi-year transformation cum cost-cutting programme and results are finally showing up.
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StarHub is guiding a dividend payout of at least 6 cents for the current FY2024.
Tan and Lim believe StarHub will pay 7.5 cents for FY2024, which translates into a yield of 7% at current prices.
For its FY2023, its total payout of 6.7 cents has beat expectations.
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The Singapore Research team at RHB Bank Singapore has remained "neutral" on StarHub but with a higher target price of $1.18 from $1.15.
"StarHub’s results trumped estimates on lower-than-expected depreciation," writes the team in its Feb 9 report. StarHub's core earnings of $149.6 million for the FY2023 stood at 109% of the team's full-year forecast.
"While the bulk of its transformation investments will be booked by end-2024, uncertainties remain as to the realisation of benefits and cost savings," it adds.
The team's new target price includes a 2% environmental, social and governance (ESG) premium to align with the latest country median.
