The way Arthur Pineda of Citi Research sees it, now is the time to “buy” on the dip. To be sure, shares in Singtel opened 3.3% lower on April 29 at $2.33. It has since climbed back about 2% to $2.39 on April 30. The research house has also increased its target price to $3.00 from $2.88 previously.
Despite recent news on Singapore Telecommunications (SGX:Z74
) (Singtel) booking an impairment of $3.1 billion for its upcoming FY2024 ended March 31, analysts are remaining upbeat on the stock and keeping their “buy” calls.
Singtel, on April 29, announced that it expects to recognise a $3.1 billion non-cash impairment in FY2024, mainly from Optus, which is the telco’s Australian business. Singtel expects to record non-cash impairment provisions of approximately A$540 million ($470 million) on Optus’ enterprise fixed access network assets; non-cash impairment provision of approximately $2 billion on the goodwill of Optus; as well as non-cash impairment provision for goodwill of approximately $340 million for the Asia Pacific cyber security business mainly from general business weakness on lower corporate spending. In addition, an estimated $280 million of non-cash impairment provision is expected for NCS Australia due mainly to higher cost of capital.
