Keppel Corporation Limited (SG:BN4) is a group company involved in a wide range of businesses through its subsidiaries. It includes asset management, urban development, energy, and more.
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The last few years have been rewarding for the shareholders, who have earned returns of 87% in a three-year timeframe. The stock further gained momentum after the company announced its 2022 earnings. The company posted higher profits of S$927 million in 2022, mainly driven by the asset management segment.
The company was also in the news after it completed the merger of its offshore marine business with Sembcorp Marine Ltd. (SG:S51). With this deal, Keppel has exited the marine operations business to focus on its real estate, telecom, logistics, and other businesses.
Sembcorp, on the other hand, is expected to generate higher synergies through this deal based on its stronger position in the marine industry. The total order book for the combined business is S$18 billion, which must be fulfilled over the next three years.
Technical Indicators
As per the technical analysis on TipRanks, Keppel is a Strong Buy based on the summarized signal of oscillators and moving averages. The oscillators hint at a Neutral signal, while the moving averages suggest a Strong buy.
In terms of exponential and simple moving averages, the stock is a Buy on different time frames like the 10-day, 50-day, 100-day, and 200-day.
As compared to Keppel, Sembcorp Maine has a Sell signal based on the summary of the technical indicators. The stock is a Strong Sell based on the moving averages and has a Neutral signal from oscillators.
Is Keppel a Good Investment?
Considering the strong fundamentals of the company, Keppel stock presents a good opportunity for long-term investors.
As investors await the trading update for Q1 2023, the stock has earned Buy ratings from analysts. Four days ago, DBS analyst Pei Hwa Ho maintained a Buy rating on the stock and expects around 34% growth in the share price.
Hwa described the stock as an “undervalued gem” and expects the earnings to grow at a CAGR of 12% in 2023 and 2024. She is highly bullish on the company’s asset management segment, which contributes the most to topline growth with recurring incomes.
Overall, BN4 stock carries a Moderate Buy rating on TipRanks based on five Buy versus one Sell recommendations. The average price prediction is S$8.16, which implies more than a 30% upside on the current price.
Closing Thoughts
Analysts are bullish on the Keppel stock and predict further growth. Investors can feel safe because of the company’s varied operations and consistent earnings.
