Assessing Singapore Airlines (SGX:C6L) Valuation After Profit Slump, Air India Hit and New Special Dividend Plan

Singapore Airlines (SGX:C6L) just posted a sharp 68% drop in net profit, largely tied to its Air India stake and softer interest income, yet it simultaneously rolled out a three year special dividend plan.

See our latest analysis for Singapore Airlines.

The stock is hovering around S$6.33 after the profit slump and special dividend news, with a mildly negative year to date share price return but a solid five year total shareholder return of 74.72%. This suggests longer term momentum remains constructive.

If this mix of yield and recovery potential has your attention, it is also worth exploring other aviation and defense names via aerospace and defense stocks for fresh ideas beyond Singapore Airlines.

With profits under pressure, a generous special dividend, and the share price sitting just below analyst targets, the key question now is whether Singapore Airlines is trading at a discount or whether markets already price in its future growth.

Most Popular Narrative Narrative: 3% Overvalued

With Singapore Airlines last closing at S$6.33 against a narrative fair value of about S$6.17, the story hinges on moderate growth and richer future multiples.

The analysts have a consensus price target of SGD6.39 for Singapore Airlines based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of SGD7.0, and the most bearish reporting a price target of just SGD5.5.

Read the complete narrative.

Passenger demand looks strong, cargo is softening, and future earnings are modeled to reset at a very different margin and valuation level. Curious what that reshaped earnings base and higher forward multiple really assume about Singapore Airlines five years from now? The numbers behind this narrative may surprise you.

Result: Fair Value of $6.17 (OVERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, stronger than expected passenger demand or sustained cost efficiencies could offset margin pressure. This could support higher earnings and potentially justify a richer valuation.

Find out about the key risks to this Singapore Airlines narrative.

Another Angle, Same Stock

On simple earnings multiples, Singapore Airlines looks cheap, trading at 8.8 times earnings versus 14.7 times for the SG market, 14.5 times for peers, and a fair ratio of 13.3 times. If sentiment normalizes, the share price could potentially move toward that higher band.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Singapore Airlines Narrative

If you see the story differently, or simply prefer to dive into the numbers yourself, you can craft a personalized view in minutes: Do it your way.

A great starting point for your Singapore Airlines research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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