- Reiterate BUY, with new ST Engineering's target price of S$11.70 (from S$10.70), 14% upside and ~2% yield, as we lift FY26F-27F profit by 2% and re-rate target multiples to reflect improving earnings visibility.
- - Read this at SGinvestors.io -
- Our FY24F-29F remain more conservative than ST Engineering’s targets (8.6% revenue CAGR; up to 13.6% profit CAGR), leaving scope for upside on stronger order wins and backlog execution progress.
Commercial aerospace (CA) is a near-term earnings driver
- CA is a near-term earnings driver, with growth hinging on monetising growing MRO capacity. As aircraft delivery backlog keeps older fleet flying for longer, we see airframe, components and engine MRO to hold up despite higher costs and recent aviation disruptions, as maintenance compliance is non-discretionary. CA margin has improved on mix and operating leverage.
- - Read this at SGinvestors.io -
Defence & public security (DPS) remains the growth pillar
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