What’s next for SGX shares?

• Singapore Exchange Ltd (SGX: S68) share price closed at S$10 on Friday (19 August 2022)
• It is down to S$9.79 as at 13:00 SGT on Tuesday (23 August 2022)
• CIMB analysts cut their SGX stock rating to ‘hold’, while RHB lowered its price target
• Keen to trade SGX shares? Open an account with us to start now.

How did SGX fare in FY2022?

Singapore Exchange (SGX) reported its FY2022 results last week, where it saw adjusted net profit come in 2% higher from a year ago at S$456.4 million.

Total revenue increased 4% to S$1.099 billion – the highest ever since listing. Excluding treasury income, total revenue grew 7% to S$1.05 billion.

Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) was S$637.8 million, while adjusted earnings per share stood at S$0.427, up from S$0.418 in FY2021.

The board of directors proposed a final quarterly dividend of S$0.08 per share. It will be payable on 21 October 2022 and is subjected to approval at the forthcoming annual general meeting.

If approved, it will bring the total dividends in FY2022 to S$0.32 per share.

Regarding FY2023’s outlook, SGX Group CEO Loh Boon Chye said the company is ‘sharpening’ its equities products to ‘stay at the forefront of global investing trends’. However, with increasing risks in the global economy, portfolio risk management activity is expected to rise in tandem.

Notwithstanding these risks, the group has maintained its medium-term revenue growth expectation of a high single-digit percentage range.

SGX stock price: what’s the latest forecast?

SGX’s shares rallied to a high of S$10.02 a share after it released its full-year financial results.

The blue-chip counter is down slightly in the last one month but up by 4.4% year-to-date.

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 4.7% upside potential from SGX’s last traded price of S$9.80.

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 his 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.

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