UOB Kay Hian analyst K Ajith has downgraded his recommendation on Singapore Technologies Engineering (ST Engineering) to “hold” from “buy” as he deems the counter’s valuation multiples being unlikely to expand further despite its continued growth in orderbook.

To this end, he has lowered his target price estimate slightly to $4.25 from $4.26 previously.

“We value ST Engineering on an enterprise value (EV)/Invested Capital basis and have raised our terminal growth rate assumption to 2.7%. At our fair value, ST Engineering will be trading at 25.2 times FY2022’s estimated earnings,” he writes in an Aug 13 report.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook