Why are Singtel shares rising?
The telecommunications company’s stock price closed higher, following its latest results and a new divestment deal.
![singtel share stock price target ratings](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/news-article-image-folder/BG_singapore_singtel_telecommunications_12423432443.jpg/jcr:content/renditions/original-size.webp)
- Singapore Telecommunications Ltd (SGX: Z74) share price rallied 2.3% on Thursday (25 August 2022)
- The group reported a 41% growth in net profit in the first quarter
- It will also be selling S$2.25 billion worth of Bharti Airtel shares
- Keen to trade Singtel shares? Open an account with us to start today.
How did Singtel fare in the first quarter?
Singtel saw a 41% year-on-year (YoY) increase in net profit for the first quarter ended 30 June 2022.
This was due to improved operational performance and exceptional gains from Airtel and dilution of the group’s effective shareholding in Australia Tower Network, the group said.
Underlying net profit increased 11% YoY, while post-tax contributions from regional associates jumped 12% YoY with continued strong performance by Airtel.
The telco’s operating revenue and earnings before interest, tax, depreciation, and amortisation (EBITDA) were down 5.6% and 2.0% respectively due to the absence of contributions from national broadband network (NBN) migration and Amobee, as well as a 4% depreciation of the Australian Dollar.
The group also announced on 25 August 2022 that it has entered into a share purchase agreement to sell a 3.3% direct stake in regional associate Airtel to Bharti Telecom.
The sale, to occur any time before 23 November 2022, will unlock approximately S$2.25 billion as part of the Singtel Group’s capital recycling strategy.
Singtel stock price: what’s the latest forecast?
The blue-chip counter is up by nearly 15% year-to-date.
In terms of outlook, Singtel shares have a consensus rating of ‘outperform’ and an average price target of S$3.18, based on the latest SGX StockFacts data.
The price target equates to a 19.1% upside potential from its last traded price of S$2.67.
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).
Thinking of trading Singtel shares?
Go long or short via CFDs on Singtel and other Singapore shares with our award-winning platform.* Open an account with us to start trading shares immediately.
*Awarded the Best Online Trading Platform by Influential Brands in 2021.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
![](http://a.c-dn.net/c/content/dam/publicsites/igcom/uk/images/Rebrand/Article_banners/Shares-global-component-banner.jpg/jcr:content/renditions/original-size.webp)
Seize a share opportunity today
Go long or short on thousands of international stocks.
- Increase your market exposure with leverage
- Get spreads from just 0.1% on major global shares
- Trade CFDs straight into order books with direct market access
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.