Top 5 Singapore stocks to watch in September 2022

1. Singapore Telecommunications Ltd
2. Singapore Airlines Ltd
3. Keppel Corp Ltd
4. Singapore Exchange Ltd
5. Lendlease Global Commercial REIT

1. Singapore Telecommunications Ltd (SGX: Z74)

Singapore Telecommunications Ltd (Singtel) shares have a consensus rating of ‘outperform’ and an average price target of S$3.18, based on the latest SGX StockFacts data on 1 September 2022.

The price target equates to a 20.5% upside potential from its last traded price of S$2.64.

RHB’s equity research team reiterated a ‘buy’ rating and price target of S$3.55 following the group’s latest financial results and divestment announcement.

The analysts said Singtel’s first quarter results ‘came in light’ but earnings should pick up momentum in the second half on higher roaming revenue, positive impact from Optus’ repricing and sale of non-core assets.

‘We see a further improvement in roaming traffic and prepaid sales, from higher tourist arrivals alongside stronger enterprise contributions. Singtel remains our preferred telco pick on its positive earnings execution and the unlocking of latent value from asset monetisation exercises,’ they added.

Regarding Singtel’s capital recycling strategy, the analysts see the group’s loss-making cyber-security outfit, Trustwave, as the next in line to be monetised (for around S$700 million).

2. Singapore Airlines Ltd (SGX: C6L)

The aviation stock has a consensus rating of ‘rating’ and average price target of S$5.38, based on the latest analyst sentiments published by SGX StockFacts.

The price target equates to a slight upside potential from Singapore Airlines Ltd (SIA)’s last traded price of S$5.32 a share.

CIMB’s equity research team wrote recently that it expects the airline to ‘do very well in the coming quarters’.

This is ‘due to the combination of rising capacity restoration, strong demand, high load factors and robust yields’.

‘For FY2023 (1 April 2022 to 31 March 2023) as a whole, we think that the SIA Group should be able to restore 74% of its pre-Covid-19 capacity, rising to at least 95% in FY2024 or higher if China reopen its borders sooner’.

As such, they raised their 2022 year-end target price for SIA shares from S$5.89 to S$6.10 and rating to ‘add’ from ‘neutral’.

Key downside risks include the potential for higher oil prices in the event of negative geopolitical developments, and more competition once other airlines are able to deploy more of their fleet.

3. Keppel Corp Ltd (SGX: BN4)

Keppel Corp Ltd (Keppel) shares have an average price target of S$7.30 and rating of ‘outperform’, based on the latest SGX StockFacts consensus data.

The price target represents a slight downside from Keppel’s last traded price of S$7.37.

The latest call came from UOB analyst Adrian Loh, who reiterated a ‘buy’ call and price target of S$10.11.

He wrote that Keppel’s latest net profit and dividend of S$0.15 per share were better-than-expected.

The proposed dividend amount represents a pay-out ratio of 62%, which is higher than its historical pay-out ratio of 39-59% in the past 10 years.

However, UOB remains ‘cautiously optimistic that its China property business would turn around in the medium term’.

CIMB analyst Lim Siew Khee also maintained an ‘add’ rating and price target of S$9.37 on 25 August 2022. She wrote that Keppel’s plans to acquire an 80% stake in 800 Super Holdings Ltd., a waste collection company, ‘could be an asset’ in the medium term.

4. Singapore Exchange Ltd (SGX: S68)

The latest analyst sentiments published by SGX StockFacts show a consensus rating of ‘neutral’, alongside a price target of S$10.26 on the stock.

The price target equates to a 7.77% upside potential from Singapore Exchange Ltd (SGX)’s last traded price of S$9.52.

Following the results, CIMB analysts lowered their rating to ‘hold’ while keeping price target at S$10.40.

‘While we expect treasury income to drive sequential earnings growth in FY2023 given the higher interest rates, we believe that this has been priced in and downgrade SGX to “hold”’, the analysts wrote on 19 August 2022.

On the other hand, RHB analyst Shekhar Jaiswal kept a ‘neutral’ call on SGX shares, but cut price target to S$10.30 from S$10.70.

He lowered the FY2023 and FY2024 earnings forecast by 3% to 4%, adding that a ‘modest growth outlook, below market dividend yield, and forward price-to-earnings ratio being higher than the historical average’ supports his current call.

5. Lendlease Global Commercial REIT (SGX: JYEU)

In terms of stock outlook, Lendlease Global Commercial REIT (LREIT) shares have an average price target of S$0.97 and rating of ‘outperform’, based on the latest SGX StockFacts consensus data.

The price target equates to an upside potential of roughly 19% from the stock’s last traded price of S$0.815.

The latest investment thesis came from UOB analyst Jonathan Koh on 31 August 2022. Koh reiterated a ‘buy’ call on the stock and raised price target from S$0.96 to S$0.99.

The analyst wrote that LREIT provides an attractive FY2023 distribution per unit (DPU) yield of 6.1%.

He added that Jem, LREIT’s largest asset which accounts for 59.3% of its portfolio valuation, will benefit from the revival of the High Speed Rail construction.

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