What’s next for SIA shares?

• Singapore Airlines Ltd (SGX: C6L) share price closed at S$5.41 on Monday (1 August 2022)
• The airline saw operating profit surge to S$556 million in Q1 FY2022/2023
• CIMB’s equity research team has raised its target price on the stock
• Keen to trade SIA shares? Open an account with us to start today.

SIA posts ‘record’ Q1 results

Singapore Airlines (SIA) shares have rallied as much as 2.4% since it reported ‘record’ first quarter (Q1) results for FY2022/2023.

The group posted a first quarter FY2022/2023 operating profit of S$556 million, which is the second-highest quarterly operating profit in its history.

This is a S$830 million improvement from an operating loss of S$274 million posted in the same quarter a year ago.

Passenger flown revenue burgeoned 119.3% quarter-on-quarter (QoQ) to S$2.7 billion on the back of a 126.7% growth in traffic. Passenger load factor rose 34.1 percentage points to 79%, the highest since the onset of the pandemic, as the traffic growth outpaced the capacity expansion of 28.9%.

The group recorded an operating cash surplus of S$1.5 billion for the three months, a QoQ improvement of S$978 million.

SIA stock price: what’s the latest forecast?

The airline group’s stock has been in an uptrend in the last one month, increasing roughly 5.5% since 4 July 2022.

On a year-to-date basis, SIA shares are up by 8%.

In terms of stock outlook, the national carrier has an average price target of S$5.38 and rating of ‘neutral’, based on the latest SGX StockFacts consensus data.

The price target represents a slight upside potential from its last traded price of S$5.41.

The latest call came from CIMB analyst Raymond Yap, who maintained a ‘hold’ call with a higher price target of S$5.89 (from S$5.75).

He said that SIA’s Q1 core net profit of S$322 million ‘outperformed expectations’. Following that, he raised his full-year core net profit forecast for the group by 84%.

Meanwhile, UOB analyst Roy Chen kept a ‘hold’ rating and price target of S$4.85 on 14 July 2022.

He had expected SIA to report a net profit of between S$180 million to S$350 million for the first quarter, ‘driven by a strong pax volume recovery and strong airfares in recent months’.

He had also deemed the current industry FY2023 full-year net profit forecast of S$316 million for SIA to be ‘conservative and due for positive surprises’.

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