Singtel shares: what to expect from Q2 results

• Singapore Telecommunications Ltd (SGX: Z74) share price rose to a one-month high on Monday (7 November 2022)
• The telco is scheduled to release its second quarter (Q2) results before the market opens on 10 November
• Maybank analysts have kept a ‘buy’ call on the stock
• Keen to trade Singtel shares? Start today with an IG account.

Singtel stock price target: what’s the latest?

Singtel shares rallied to a one-month high of S$2.56 ahead of its Q2 and first half financial results.

The telco’s stock value is up 9% this year.

In terms of outlook, Singtel shares have a consensus rating of ‘outperform’ and an average price target of S$3.19, based on the latest SGX StockFacts data.

The price target equates to a 25.1% upside potential from its last traded price of S$2.55.

Maybank’s equity research team maintained a ‘buy’ rating and share price target of S$3.15 in its latest investor note.

The analysts named Singtel as its top sector pick, on the expectation that the company’s third quarter earnings will grow by 1.7% on a quarterly basis. They also believe that the telco sector ‘remains a proxy to regional economic recovery’ with international roaming revenue starting to improve.

How will Singtel fare in Q2?

Singtel will announce its Q2 and first half results of FY2023 before trading begins on Thursday (10 November).

Maybank analyst Kelvin Tan expects Singtel’s ‘earnings momentum to remain broadly positive’ for the September-ending quarter as well as beyond.

UOB analysts expect Singtel’s first half revenue to grow by 3% to 4% year-on-year (YoY), and for underlying net profit to be boosted by 7% to 8%. They also expect the dividend pay-out ratio for the first half to fall between 70% and 75% of underlying net profit, as compared to the group’s dividend policy of 60% to 80%.

Singtel posted a 41% YoY increase in net profit in the June-ending quarter.

Underlying net profit increased 11% YoY, while post-tax contributions from regional associates jumped 12% YoY with continued strong performance by Airtel.

However, the telco’s operating revenue and earnings before interest, tax, depreciation, and amortisation (EBITDA) fell 5.6% and 2.0% respectively.

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