Top 3 Singapore stocks to watch in January 2021
Analysts have picked out these three Singapore Exchange (SGX)-listed stocks as ones to watch in the month ahead. Here are their insights.
Below are three recommended Singapore-listed equities to trade for the month of January 2021, based on the latest ratings, price targets and research provided by equity analysts.
1. United Overseas Bank (SGX: U11)
Latest share price (11 January 2021): S$23.90
12-month target price (high end): S$27.72
Estimated upside from latest price: 16%
United Overseas Bank (UOB), Singapore’s third largest money lender, currently has an average 12-month share target price of S$24.16 from brokers polled by SGX StockFacts.
The most bullish price target came from CIMB on 31 December 2020 at S$27.72 per share alongside an ‘overweight’ rating. The analysts wrote that they ‘expect Singapore’s Phase 3 re-opening and start of Covid-19 vaccinations to spur business activity and credit growth in FY21F’.
The price target represents an upside of nearly 16% from the last traded price of S$23.90 as of Monday (11 January 2021).
Meanwhile, DBS re-added UOB back to its list of ‘equity picks’ on 07 January 2021 at a suggested buy-in rate of S$22.56 a share.
Analysts wrote that they returned UOB to their large cap picks as earlier near-term uncertainty from the US Georgia state Senate runoff ‘have passed’.
‘The 80 basis points rise in US 10-year yield to 1.0355 should underpin banks. Current valuation is inexpensive at near 1.5 standard deviation below its average 15-year forward price-to-book value and the ongoing provisioning is a buffer,’ they further noted.
2. Boustead Projects (SGX: AVM)
Latest share price (11 January 2021): S$1.08
12-month target price (high end): S$1.33
Estimated upside from latest price: 23.15%
CIMB analyst Ong Khang Chuen reiterated an ‘add’ rating on real estate solutions provider Boustead Projects while raising price target to S$1.33 a share.
Ong believes that the establishment of the Boustead Investment Fund (BIF) on 31 December 2020 will help to unlock the value of Boustead Projects’ leasehold portfolio and as a platform to house future industrial properties.
He added that the company is expected to record S$136 million of disposal gain from its initial injection of 14 properties into BIF, with a total consideration of S$332 million.
Furthermore, with Boustead Projects already possessing a strong balance sheet (end-Sep 2020: S$56 million net cash), CIMB sees a ‘high possibility of special dividends being declared after the (BIF) transaction is approved’.
‘Assuming 50% of the net cash proceeds are paid out as special dividends, dividend per share could amount to S$0.22 or a dividend yield of 26.6% for FY3/21F,’ Ong concluded.
3. Singapore Airlines (SGX: C6L)
Latest share price (11 January 2021): S$4.32
12-month target price (latest): S$3.80
Estimated upside from latest price: 13.7%
Another stock to watch is Singapore Airlines (SIA), which is now on the rebound, after having started the new year on a brief decline.
SIA currently has an average 12-month share target price of S$4.134 and rating of ‘neutral’, based on the latest data from SGX StockFacts.
The stock is also among UOB’s latest ‘stock alpha picks’ list, with analysts keeping a ‘sell’ rating.
Analyst K Ajith wrote that the airline’s stock price has ‘run ahead of foreseeable fundamentals’.
‘We believe the euphoria following the announcement of vaccines is unjustified and opine that SIA is overvalued. For a start, we had already imputed a recovery in traffic for FY2022 and had pegged fair value at 0.9x to FY2022F book value,’ Ajith stated in a report posted on 08 January 2021.
He also opined that the stock is more expensive than it was before Covid-19 struck, with current enterprise value/earnings before interest, tax, depreciation and amortisation multiple at over 2SD above its long-term mean.
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