Thanks to $1.5 billion booked from the partial divestment of its Comcentre corporate headquarters and the regular trimming of its stake in listed associate Bharti Airtel, including most recently, $2 billion from selling a 1.2% stake on May 16, Singtel has already met more than half of this $6 billion target.
On May 22, Singtel reported higher FY2025 earnings, thanks to continuous improvement in its operational earnings plus divestment gains. The telco has set a higher asset monetisation target of $9 billion.
From the analysts’ perspective, this means Singtel has the potential to increase its total dividend payout further, with contributions from better operations and the monetisation of additional assets.
For FY2025 ended March 31, Singtel plans to pay a total dividend of 17 cents, an increase from 15 cents paid in FY2024. Besides the interim dividend of 5.6 cents already paid, it plans to pay a core final dividend of 6.7 cents, plus the value realisation dividend of 4.7 cents.
See also: Analysts stay bullish on Seatrium as CEO Ong signals margin gains
To further return value to shareholders, Singtel will buy back $2 billion worth of shares over three years to improve earnings per share and, presumably, Singtel’s share price, which have gained around three-fifths since the active capital management plans were announced last May, with further potential upside.
Following the results announcement on May 22, Prem Jearajasingam of CGS International is keeping his “hold” call and $4 target price. He calls the higher asset monetisation target of $9 billion a “positive surprise”. Still, he believes that the upside potential is capped at the current valuation of 22.5 times FY2026 earnings, even as capital recycling efforts are tracking ahead.
However, numerous other analysts, having already accorded Singtel higher target prices over the past year, have raised their respective target prices. They note that the holding company discount should be further narrowed as active capital management shifts into “high gear”.
See also: Edvantage: China-based undervalued private education play
While Hussaini Saifee of Maybank Securities has trimmed his FY2026 and FY2027 earnings estimates to account for lower earnings from associates in Thailand and India, he believes that Singtel deserves a higher valuation with the capital management plans.
“Singtel’s holding company discount at 25%–30% should narrow in light of improved operational performance, tight execution and clear and higher capital return initiatives,” says Saifee, who has raised his target price to $4.30 from $3.96.
UOB Kay Hian’s Chong Lee Len and Llelleythan Tan Yi Rong, calling the $2 billion share buyback programme a “surprise”, have similarly raised their target price from $3.58 to $4.58.
“Singtel remains an attractive play against elevated market volatility, underpinned by improving business fundamentals and a decent 4.7% dividend yield for FY2026,” state Chong and Tan.
“We stay positive on its outlook with improving ROIC, capital management upside and operational execution as rerating catalysts,” says RHB Bank Singapore, which now values Singtel at $4.50, up from $3.80.
For Sachin Mittal of DBS Group Research, Singtel might redeploy capital freed up to accelerate core ebit growth. He notes that Singtel is guiding for high-single-digit growth in core ebit in FY2026, led by $200 million in cost savings. He expects FY2027 to clock at a similar pace, thanks to “sharp growth” in Singtel’s data centre businesses and mobile revenue recovery.
“Consolidation among smaller telecom players in Singapore is also possible,” says Mittal, who has raised his target price to $4.40 from $4.27.
For more stories about where money flows, click here for Capital Section
A team of analysts at HSBC Global Research, led by Piyush Choudhary, figures that this current FY2026, Singtel’s ebit growth will be primarily led by Australian unit Optus and regional enterprise services arm NCS.
In FY2027, ebit growth would then be from a doubling of data centre capacity in Singapore to around 120MW. US investment firm KKR will help Singtel fund its regional data centre growth ambitions. HSBC forecasts Singtel’s ebit to grow at a CAGR of 10% from FY205 to reach $1.8 billion in FY2028.
With Singtel’s own operational earnings growth, plus higher dividends contributed by its mobile associates thanks to higher mobile price plans, the telco’s “outlook for dividends is upbeat”, says HSBC, which forecasts a FY2026 payout of 17.5 cents and 18 cents for FY2027. After reducing its holding company discount from 40% to 30% to reflect the “prudent asset recycling programme”, HSBC has raised Singtel’s target price from $4.15 to $4.45.
