Given the muted outlook, analysts covering this counter have trimmed their distribution per unit forecasts by between 8 and 13% for FY2026 to FY2027, as MLT moves its distribution to one that is not boosted by divestment gains.
In the wake of the recent sell-off to as low as $1.08, which, at this level, means MLT is trading at FY2026 - FY2027 yield of around 6.6%.
This implies a spread against the 10-year Singapore bonds of north of 4.1% - the highest level since 2018, apart from during the pandemic.
DBS calls this counter an "undervalued play" that is also one of Singapore's "most liquid proxy".
"We anticipate the macro tailwinds to be a near-term support for MLT in the interim and a compression of the yield spread towards historical mean levels, implying an upside north of 15%-20%," says DBS.
MLT closed at $1.12 on May 13, up 3.7%, but down 13.18% year to date.
