SGX-listed stocks Sembcorp Marine (SG:S51) and Keppel REIT (SG:K71U) have Buy ratings from analysts. Both companies have delivered better results for 2022 and are well-positioned to tap further growth opportunities in 2023.
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Let’s see what makes them the analysts’ favorites.
Sembcorp Marine Limited
Sembcorp Marine offers a full range of engineering solutions to the marine, energy, and offshore industries worldwide.
In February, the company reported its 2022 earnings, with positive EBITDA in the second half. The full-year loss of S$1.2 billion in 2021 has been reduced by 78% to S$261 million in 2022. The revenues were up 4.6% to S$1.8 billion in 2022 as compared to the previous year.
Last month, Sembcorp also completed its acquisition of Keppel’s offshore and marine engineering businesses for $3.3 billion. With this deal, Sembcorp is now highly confident in its position in the marine industry and has higher capabilities to fulfill order pipelines. The combined entity has a higher order book worth S$18 billion spread over the next three years.
The company is also expected to generate synergies from the deal considering its higher geographical base, larger operations, and improved efficiencies from both companies.
Analysts see a brighter future for the company based on this deal and a strong earnings momentum in its results.
Sembcorp Marine Share Price Target
According to TipRanks’ rating consensus, S51 stock has a Strong Buy rating with all four Buy recommendations.
The average target price is S$0.16, which has an upside potential of almost 50% from the current price level.
Keppel REIT
Keppel REIT is among the most popular real estate investment trusts in Asia. The company owns commercial properties in prime locations in Sydney, South Korea, Melbourne, Singapore, Tokyo, etc.
In its full-year results for 2022, the company’s property income increased by 1.2% to S$219.3 million. The company occupancy ratio of 96.3% was quite solid as of December 31, 2022.
Analysts feel positive about the company’s numbers based on the expected growth in the office rental sector in Singapore. Analysts are also seeing a trend of rapidly increasing rentals along with higher demand for offices. The company secured 10% of rental reversions in 2022 for its office portfolio.
What is Keppel REIT Price Target?
Based on one Buy and one Hold recommendation, K71U stock has a Moderate Buy rating on TipRanks.
The average target price of S$1.03 is 20.5% higher than the current trading price.
Conclusion
Both Keppel REIT and Sembcorp Marine earn a thumbs up from analysts based on their recent results and the positive outlook.
Sembcorp Marine is flying high following the completion of its recently completed acquisition, which will strengthen its position in the offshore and marine industries and provide multiple synergies.
Regarding Keppel REIT, the growth in Singapore’s office rental space will drive the top line for the company. However, the higher interest rates could be a burden in the near term.
