Deutsche Bank reinstates SATS’ (S58.SG) Buy rating with a $3.80 target price saying the company is well-positioned for long-term structural growth.

 

“We like SATS given its strong market positions in both the aviation and food solutions sectors. We think (recent Japanese acquisition) TFK is value-accretive and estimate it adds 6% to our SATS valuation.”

 

It says further value-accretive M&A could be positive catalysts while “the growing importance of the food solutions business increases opportunities for synergies across the group. SATS offers 17% 3-year net profit CAGR on our estimates, which should support a relatively attractive 5%-6% dividend yield.” 

 

The shares are off 0.4% at $2.81. SATS’ 3Q results are due Tuesday.