Despite the long recovery in air travel, analysts have maintained their optimism for Singapore Airlines (SIA).

This comes after the national flag carrier announced that it was successful in deferring the delivery of new aircraft worth $4 billion and released weak 3QFY2021 results ended Dec 31.

CGS-CIMB Research has kept its “add” rating for the stock with an incrementally higher target price of $4.90 from $4.89 previously.

Although the brokerage has acknowledged SIA’s deferment of capital expenditure (capex), it notes that it has already factored in some degree of reduced capex spending.

The progress of the Covid-19 vaccine rollouts across the globe, which lend “hope” to SIA for a gradual recovery in traffic, is more crucial to track closely, it says.

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The recent surge in crude oil prices may also deliver strong mark-to-market fuel derivative gains for the airline, it adds.

“Market response should be muted,” CGS-CIMB analyst Raymond Yap says in a Feb 10 report in reference to SIA’s capex announcement.

Meanwhile, OCBC Investment Research, too, has reiterated its “buy” call for the stock with a higher fair value of $4.80 from $3.70 previously.

The brokerage says the “worst is likely over”, though the road to recovery is long.

SEE: Singapore Airlines trials pre-departure Covid-19 tests to revive travel

It says SIA is poised to benefit from Singapore’s progressive re-opening and the roll-out of vaccines in 2021.

Moreover, it expects air cargo to remain strong and benefit from the recovery of global economy, e-commerce and shipment of vaccines in 2021.

“Gradual recovery ahead,” OCBC analyst Chu Peng writes in a note dated Feb 8.

As at 11.29 am, SIA was down 3 cents or 0.7% at $4.36 with 2.5 million shares changed hands.