Singtel share price: Is there room to grow?

• Singtel (SGX: Z74) share price hits S$2.38 a share, up 0.4%
• The stock may have bottomed late last year, analysts noted
• Regional associates’ recovery and the 5G rollout could support Singtel’s earnings
• Singtel continues to investigate a recent cybersecurity breach
• Trade Singtel shares, long or short, with an IG account

Singtel shares edge up

Shares of Singapore Telecommunications (Singtel) rose 0.4% day-on-day to reach S$2.38 on Wednesday morning (10 March 2021), though they eased back to S$2.37 by the midday break.

The stock had risen 1.3% on Tuesday. Year-to-date, it is up about 2.6%.

Analyst consensus was largely bullish on Singtel shares, with 15 ‘buy’ recommendations, four ‘hold’ calls and none with ‘sell’. Their average 12-month target price was S$2.97, according to Bloomberg data.

Uplift from travel revival and 5G

UOB analysts said Singtel’s share price ‘appears to have bottomed’ in November 2020 when it traded at -1 standard deviation below its five-year mean EV/Ebitda (enterprise value to earnings before interest, taxes, depreciation, and amortisation). The stock had hovered within S$2 to S$2.51 that month.

Potential catalysts for its share price could be the rollout of Singtel’s digital banking plans in the first half of 2021, the reopening of economies, and a faster-than-expected recovery in Optus’ consumer and enterprise business, UOB noted, reiterating its ‘buy’ call.

CIMB analyst Foong Choong Chen last week recommended ‘add’ with a S$3.10 target. He expects core earnings per share to recover 65% year-on-year in FY2022, driven by ‘attractive’ dividend yields of 5-6% for FY2022-2023, as well as a turnaround at Indian associate Bharti Airtel and better earnings at Indonesian joint venture Telkomsel.

Overall mobile average revenue per user (ARPU) could see some support after the standalone 5G networks are rolled out commercially and drive take-up of 5G plans among early adopters, Foong added.

Likewise, OCBC’s research team sees possible mobile APRU accretion for Singtel in the medium term, from the migration to 5G.

OCBC also believes Singtel remains a viable play on the reopening of regional economies, as the travel market’s return could deliver a boost to its mobile operations, especially in Singapore.

Potential asset monetisation would be another catalyst, the research team said, maintaining its ‘buy’ call and S$2.85 fair value.

Singtel probing data breach

Meanwhile, the telco is continuing with its investigations to understand the full extent of a recent data breach, first disclosed on 11 February 2021.

It is also appointing a data and information service provider, to provide identity-monitoring services for affected customers, to help them manage potential risks.

Hackers had attacked a third-party file-sharing system by Singtel’s vendor Accellion.

Singtel said on 17 February 2021 that it had completed initial investigations. The data taken included consumer information containing combinations of personally identifiable information, and 23 enterprises were also affected.

A large part of the leaked data was Singtel’s internal information that is non-sensitive, including data logs, test data, and emails.

How to trade Singtel stocks with IG

Are you feeling bullish or bearish on Singtel's stocks?

Either way you can buy (long) or sell (short) the asset using IG's industry-leading trading platform, by investing in the share directly, in a few easy steps:

1. Create a live or demo IG Trading Account, or log in to your existing account
2. Enter <Singapore Telecommunications> in the search bar and select the instrument
3. Choose your position size
4. Click on ‘buy’ or ‘sell’ in the deal ticket
5. Confirm the trade