While Mok was positive on the latest set of numbers, he was also mindful of the potential impact of the rising input costs due to the ongoing Middle East conflict, as some contracts are set to expire soon. “Hence, we got to try and manage that with our customers as well,” Mok says.
Nonetheless, the positivity has been reflected in its share price. Following the results, Sats’ share price rose by almost 20% to close at $4.04 on June 3, as various analysts maintained their positive stance on the stock.
For Ada Lim of OCBC Group Research, the company’s FY2026 earnings of 19.2 cents per share were 102.8% of her forecast. “For now, global travel demand appears to remain healthy, in our view, which should support ground handling and aviation meal volumes,” she says.
However, if the conflict persists and oil prices remain elevated, consumer sentiment will be affected further. For now, she is projecting a slight margin compression in FY2027 to account for higher input and energy costs. While Lim has kept her “buy” call, she has lowered her fair value from $4.32 to $4.20, pegged to 20 times FY2027 earnings.
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For Tay Wee Kuang of CGS International, the company’s earnings of $50.7 million for the final quarter were slightly ahead of his $45 million forecast. In his May 27 report, Tay reiterates his “add” call and raises his earnings forecasts for FY2027 by 7.3% and for FY2028 by 2% to reflect stronger revenue growth in gateway services, resulting in a higher target price of $4.68 based on discounted cash flow, up from $4.53.
“We believe that the reopening of Middle East airspace and the gradual resumption of capacity by Middle East airlines despite the ongoing crisis will augur well for Sats as it continues to gain market share within the global air cargo industry,” Tay says.
He is optimistic that the company can achieve its 5% profit margin target for FY2029 earlier, in FY2028. However, the $8 billion revenue target will be contingent on a larger step-up in contributions from its food solutions business.
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Despite the near-term cost pressures, UOB KayHian’s Roy Chen says the company’s fundamentals remain strong. “With the diversified global network, Sats is likely to continue gaining market share in global cargo handling. While elevated energy prices may increase operating costs in the near term, cost pressures should be passed through to customers over time,” he reasons. Sats remains a “buy” for Chen, along with the same target price of $4.75, which is based on 19.7 times FY2028 earnings, which is in line with the company’s historical mean.
Meanwhile, Liu Miaomiao and Eric Ong of Maybank Securities are keeping their “buy” call and DCF-based target price of $4.52. They expect Sats, with its diversified global network and resilient cargo franchise, to have the necessary buffers against ongoing macro and geopolitical headwinds. “We also anticipate more meaningful earnings contribution from the Thailand central kitchen in FY2028, as operations are expected to commence in Nov 2026,” state Liu and Ong, who have raised their FY2027 earnings forecast by 7.1% and FY2028’s by 4.9%.
Jason Sum of DBS Group Research believes that with Sats’ Net debt/Ebitda now broadly within management’s target range of 2.5 to 3 times, the company should be less pressured to trim its debt load, largely incurred when it acquired WFS. Instead, there’s now more scope for excess cash to be returned as dividends or buybacks.
Sum has raised FY2027 core net income estimates by 2.3% and FY2028’s by 0.7% on stronger volume assumptions, driven by resilient air cargo demand, Americas ground-handling expansion and higher catering intensity from more direct long-haul flights. Based on an earlier target price of $4.20, Sum figures Sats is worth $4.40. At 17.9 times forward earnings, Sam sees this as a favourable risk-reward ratio.
Finally, Hashim Osman of PhillipCapital has raised his FY2027 earnings forecast by 8% due to higher gateway services revenue from new contract wins. He expects the food solutions margins to recover gradually too, as new facilities in Bangalore, Tianjin and Thailand scale toward full utilisation, leading to improved margins. As such, in addition to maintaining his “buy” call, he has raised his target price from $4.44 to $4.52.
