SINGAPORE (March 2): UOB KayHian has upgraded ST Engineering to “buy” with a higher target price of $3.28 from $3.25 previously.

The brokerage says it is positive on the outlook of the company, which provides engineering solutions to the aerospace, marine, land systems and electronics industry.

“While [recent] earnings were lacklustre, we believe that Singapore Technologies' diversified business and enhanced capabilities lower the risk profile of the firm, as compared with other industries,” it says.

It adds that the company will benefit from a low fuel price environment, while the aerospace division will benefit from increased checks on older and less fuel-efficient aircraft.

As at 2.16pm, shares of ST Engineering are up 1.67% at $3.04 while the Straits Times index is up 1.87%.