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.