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On Monday, Nomura/Instinet shifted its stance on Singapore Airlines Ltd (OTC:SINGY). (SIA:SP) (OTC: SINGF (OTC:SINGF)), upgrading the carrier’s stock from Neutral to Buy and raising the price target to SGD8.04, up from SGD6.75. The upgrade comes on the back of a positive earnings outlook for the fiscal years 2026 and 2027, coupled with an attractive valuation when compared to industry peers and the prospect of high dividend yields. According to InvestingPro data, the airline, currently valued at $16 billion, maintains a GREAT financial health score and trades near its 52-week high of $5.40.
Singapore Airlines’ current trading price reflects a fiscal year 2026 forecasted price-to-earnings (P/E) ratio of 8.6 times, which is significantly below the historical one-year-forward average of 18 times observed in the pre-pandemic period from 2015 to 2020. The current P/E ratio stands at 7.82x, supporting InvestingPro’s analysis that the stock is trading at a low earnings multiple relative to near-term growth. Nomura analysts have rolled over their valuation horizon to FY26 and maintain their valuation of the airline’s stock on a P/E basis, pegging it to 10 times the FY26 forecasted core earnings per share (EPS) of SGD0.80.
The target P/E ratio is derived from a two standard deviation decrease from the company’s pre-COVID average since 2013. With the valuation currently at 8.6 times FY26 P/E, Singapore Airlines is seen as relatively attractive compared to its peers, which are averaging a P/E ratio of 17.2 times. This represents a 50% discount, making the airline’s stock an appealing option for investors according to the Nomura analysis.
The upgrade reflects confidence in the airline’s ability to maintain resilient earnings over the next few years. Nomura’s revised price target suggests a potential upside for investors based on the current market conditions and the airline’s financial prospects.
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