Singapore Airlines (SIA) - CGS-CIMB Research 2023-07-03: Downgrade To REDUCE On Valuation Grounds

• We downgrade our call on Singapore Airlines (SIA, SGX:C6L) from Hold to REDUCE, as we think that valuations are now stretched. Even though the fundamental dynamics of the passenger airline business remain robust for the next 6-9 months, these appear to be priced in.
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• Also, weakening air cargo markets on a sequential basis have seen cargo yields decline rapidly, and there is the risk that the pace of decline may exceed our expectations. We have factored in a 40% y-o-y drop in SIA’s cargo yields for the whole of FY24F, but the Baltic Exchange’s cargo freight rates have already dropped by more than 40% y-o-y for the latest May 2023 reading.
• - Read this at SGinvestors.io -

SIA's P/BV valuations very expensive

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Above is the excerpt from research report by CGS-CIMB.
Clients of CGS-CIMB may access the full report in PDF @ https://www.itradecimb.com.sg/.

Read also CGS-CIMB's most recent report:
2024-01-09 Singapore Airlines - Upgrade To ADD For Big Returns Over Half Year.

Previous report by CGS-CIMB:
2023-11-08 Singapore Airlines - Somewhat Overcast Skies Into 2HFY24.

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