Telecommunications company Singtel (SG:Z74) and investment manager CapitaLand (SG:9CI) from Singapore have Strong Buy ratings from analysts.
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Most analysts see Singapore stocks as well-positioned amid rising global economic tensions. Also, with the opening of China’s borders, the companies expect growth in their business with a rebound in travel and other activities.
Both companies are currently trading at a price level that is below the lowest target price from the analysts. This makes an attractive entry point for investors.
Let’s discuss these stocks in detail.
Singapore Telecommunications Limited (Singtel)
Singtel is the largest telecommunications group in Asia and, hence, holds a dominant position with its network and customer base.
Analysts believe that an improvement in roaming revenues will push earnings higher in Q3 2022 and beyond. The company is set to announce its third-quarter results on February 9, 2023.
Sachin Mittal from DBS has maintained his Buy rating on the stock at a target price of S$3.15. This has an upside of 28.5%. He feels the revival of foreign travel will drive the growth of its business in Singapore and Australia.
He added, “Furthermore, increasing contributions from associates will further support the telco’s earnings growth, making the company an exciting stock that offers a better mixture of growth and yield.”
The analysts also remain bullish on the company’s dividend story. As compared to its peers in the industry, the company has a high dividend yield of 4.63%. Along with its interim dividend of S$0.046, the company announced a special dividend of S$0.05.
Mittal commented, “Singtel offers “far superior growth” than other telcos that pay dividends.”
What is Singtel’s Target Price?
The target price of the stock is S$3.17, which has an upside of almost 30%.
The lowest target price of S$2.98 is higher than the current trading price of S$2.45. The stock has the highest target price of S$3.45.
Singtel’s stock has a Strong Buy rating on TipRanks, based on nine Buy recommendations.
CapitaLand Investment Limited
Based in Asia, CapitaLand is a real estate investment management company. The company has a diversified portfolio of real estate spread across more than 40 countries.
The company’s record performance in its third quarter of 2022 helped the stock regain its momentum. The share price has been trading up by 27% in the last three months.
Analyst Adrian Loh from UOB Kay Hian has recently reiterated his Buy rating on the stock based on Q3 numbers that exceeded expectations. He is mainly bullish on the company’s fund management business, under which it started five new funds with a focus on diversification.
Loh has a target price of S$4.13, which has an upside of 5.6%.
In the third quarter, the company’s RevPAU (revenue per available unit) increased to S$110 from S$77 in the same quarter a year ago. This was driven by higher travel demand, and this number reached 92% of pre-pandemic levels.
Moving forward, analysts remain bullish on this business aspect as the company’s forward bookings show growth. Also, higher room rates will help the company offset higher labor costs.
CapitaLand Investment Share Price Target
CapitaLand’s stock has a Strong Buy rating on TipRanks, with three Buy recommendations.
The 9CI share price target is S$4.25, which is 8.7% higher than the current level. The lowest target price is S$4.12, and the highest is S$4.5.
Closing Thoughts
Both Singtel and CapitaLand were hit by the COVID-19 pandemic and the lockdowns. However, with the travel recovery, these companies have posted growth in numbers. Analysts expect this trend to continue and are bullish on these stocks.
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