However, following the share price surge, which gained 31.6% after SIA’s full-year results, Chen notes that SIA’s valuation is “very lofty” with its FY2024 P/B of 1.58x and 2.8 standard deviations (s.d.) above its historical mean. At its current share price levels, SIA’s valuation now matches its historical peak just before the global financial crisis (GFC) and is unlikely to be sustainable in the long run given Chen’s core return on equity (ROE) estimates of 12.1%, 8.5% and 7.0% for the FY2024, FY2025 and FY2026 respectively.
UOB Kay Hian analyst Roy Chen has downgraded Singapore Airlines (SGX:C6L
) (SIA) to “sell” with a higher target price of $7.07 from $5.75 previously.
The downgrade comes after Chen’s upgrade to “hold” in May after the airline released its results for the FY2023 ended March 31 on May 16.
