Singapore Post’s (Singpost) short-term prospects are likely to be weak, according to analysts.

This comes after the postal and logistics company reported a mixed set of results in 1Q FY21.

DBS Group Research points out that some of Singpost’s postal volumes are temporarily being diverted away from Singapore by some of its key customers.

This is due to the disruption in international air freight out of Changi Airport, it explains.

“We continue to believe that accelerated slowdown in domestic letter volumes is likely to weigh on the segment’s profitability which is unable to be replaced by e-commerce and international mail volumes in the meantime,” DBS analysts Sachin Mittal and Lim Rui Wen write in a note dated Aug 11.

In view of that, CGS-CIMB Research has cut its FY21-23 earnings per share forecasts for the company by 9.9%-12.9% on weaker postal margins.

Still, Singpost could outperform in the long-term.

CGS-CIMB says the company is a proxy to e-commerce, which is likely to grow steadily ahead.

CGS-CIMB has maintained its “add” rating for the stock albeit with a lower target price of 77 cents from 85 cents previously.

DBS has kept its “fully valued” recommendation for the stock with an unchanged target price of 64 cents.

As at 1.50 pm, Singpost was flat at 70 cents with 1.3 million shares changed hands.