- ST Engineering is guiding for a low 3% weighted average cost of borrowing in 2023, slightly higher than our estimate. An increase in our interest cost estimate lowers forecast earnings by 2%.
- - Read this at SGinvestors.io -
- Keep BUY rating for ST Engineering, with new S$4.05 target price from S$4.10, 11% upside from the current ST Engineering's share price and ~4% yield.
Reiterate our investment thesis for ST Engineering
- - Read this at SGinvestors.io -
- the urban solutions & satcom (USS) segment experiencing strong growth amid contributions from the TransCore acquisition beyond 2023; and
- the defence public security (DPS) segment benefiting from rising defence spending in Singapore and in the US.
- Concerns about its high levels of debt should also be allayed by ST Engineering's capacity to produce a significant free cash flow. During 2023-2025, we anticipate a gradual drop in the net debt to equity ratio.
- We think that Moody's recent reinforcement of its AAA issuer rating – the highest rating level offered by the credit rating agency – should allay investor worries about ST Engineering's elevated debt levels.
Small tweak to earnings; 2023F profit is below consensus.
- Read more at SGinvestors.io.
Shekhar Jaiswal RHB Securities Research | https://www.rhbgroup.com/ 2023-05-09
Read also RHB's most recent report:
2024-09-02 ST Engineering - New Order Win, Potential Business Opportunity; BUY.
Previous report by RHB:
2024-08-19 ST Engineering - Growth Momentum To Continue; Keep BUY.
Price targets by 5 other brokers at ST Engineering Target Prices.
Listing of research reports at ST Engineering Analyst Reports.
Relevant links:
ST Engineering Share Price History,
ST Engineering Announcements,
ST Engineering Dividends & Corporate Actions,
ST Engineering News Articles