Top 5 Singapore stocks to watch in June 2023

Top 5 Singapore shares to watch in June 2023

1. Singapore Airlines Ltd (SIA)
2. Singapore Telecommunications Limited (Singtel)
3. SATS Ltd
4. City Developments Limited (CDL)
5. Sembcorp Industries Ltd

SIA (SGX: C6L)

Singapore Airlines shares hit a four-year high in June 2023, continuing a recent bull run that started after it reported record annual profits for the financial year ended 31 March 2023.

The national airline posted a net profit of S$2.16 billion for the year, reversing a loss of S$962 million from a year earlier.

Following the upbeat earnings, OCBC analysts raised their price target on SIA shares to S$7.18 a share (up from S$6.50), while maintaining a ‘hold’ call.

The analysts, however, cautioned that much of SIA’s recovery ‘may have already been priced in’, given the stock’s current rally. They warned that SIA’s recovery momentum ‘may begin to slow later this year amidst a more competitive regional landscape and recessionary outlook’.

On the whole, the stock is up 25% so far this year. Shares are trading at S$6.91 as of 7 June 2023.

Singtel (SGX: Z74)

Singtel shares have gathered a consensus rating of ‘outperform’ alongside a stock price target of S$3.124.

The price target equates to a 27% upside potential from the telco’s last traded price of S$2.46 on 7 June 2023.

OCBC, UOB, RHB, CIMB and Maybank’s equity research teams all rated Singtel shares a ‘buy’, after the group posted higher revenue in FY2023.

Singtel’s net profit for the full year rose 14% from FY2022 to S$2.23 billion. The group said its financial position ‘remains robust’, as net debt fell to S$8.3 billion, from S$10.1 billion a year ago. Its cash and bank balance of S$3.2 billion also puts the group ‘in good stead as it continues executing on its strategy and investing for growth’.

For FY2024, dividends from the regional associates are expected to be approximately S$1.3 billion. The group’s core capital expenditure is expected to be around S$2.1 billion, comprising A$1.6 billion (S$1.4 billion) for Optus and S$0.7 billion for the rest of the group.

SATS (SGX: S58)

SATS' share price has fallen over 12% since reporting its full-year results for FY2023.

Group revenue grew 49.4% year-on-year to S$581.5 million, group expenditure increased 48.1% to S$1.81 billion, while group operating loss widened by 12.7% from a year ago to S$48 million in FY2023.

In the end, group net profit attributable to owners of the company amounted to a net loss of S$26.5 million, a S$46.9 million decrease from a net profit of S$20.4 million recorded in FY2022.

OCBC’s research team cut its SATS share price target to S$3.15 from S$3.38 following the group’s results while maintain a ‘buy’ rating.

The stock, which is down 7.4% year-to-date, has an overall rating of ‘neutral’ and average target price of S$2.90, based on SGX StockFacts data on 7 June 2023.

CDL (SGX: C09)

City Developments Limited (CDL) has seen its shares drop by nearly 17% since the start of the year.

Despite CDL’s bearishness, analysts still expect the large cap stock to ‘outperform’ in the next 12 months, with a potential for its share price to rally 25.1% during this time frame.

The latest rating and share price target for CDL came from RHB’s equity research team. The analysts rated the stock a ‘buy’ alongside a new price target of S$8.80, down from S$9.75 previously.

‘Despite a moderated residential outlook, we believe the impact to City Developments’ bottomline is manageable, as its inventory is substantially sold and the remaining landbank is mostly in mass/mid-tier segments’, RHB analysts wrote.

Meanwhile, CIMB analysts have a target price of S$8.97 and ‘add’ call on the stock.

Sembcorp Industries (SGX: U96)

The latest analyst sentiments published by SGX StockFacts show a consensus rating of ‘outperform’ on Sembcorp Industries shares, alongside a share price target of S$4.71.

The energy and urban development group’s shares are up 55% in 2023.

OCBC raised its fair value estimate on the stock to S$5.40 a share from S$4.20 previously, stating that Sembcorp ‘continues to pivot in the right direction towards renewables’, while ‘its ability to deliver higher return on equity should support the performance’ of the overall share price.

Meanwhile, CIMB maintained an ‘add’ call and price target of S$5.12 on Sembcorp Industries shares, citing the group’s latest long-term purchase agreement with Singtel worth an estimated S$180 million per annum.

On 25 May 2023, Sembcorp Industries and Singtel signed a 10-year contract to supply electricity to Singtel. The contract ends in September 2033.