It's been a good week for Singapore Technologies Engineering Ltd (SGX:S63) shareholders, because the company has just released its latest half-yearly results, and the shares gained 8.1% to S$4.56. Results overall were respectable, with statutory earnings of S$0.19 per share roughly in line with what the analysts had forecast. Revenues of S$5.5b came in 3.4% ahead of analyst predictions. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Singapore Technologies Engineering after the latest results.
Taking into account the latest results, the current consensus from Singapore Technologies Engineering's 13 analysts is for revenues of S$11.2b in 2024. This would reflect a satisfactory 4.1% increase on its revenue over the past 12 months. Per-share earnings are expected to rise 8.7% to S$0.22. Yet prior to the latest earnings, the analysts had been anticipated revenues of S$10.9b and earnings per share (EPS) of S$0.22 in 2024. So it looks like there's been no major change in sentiment following the latest results, although the analysts have made a small lift in to revenue forecasts.
Even though revenue forecasts increased, there was no change to the consensus price target of S$4.89, suggesting the analysts are focused on earnings as the driver of value creation. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Singapore Technologies Engineering, with the most bullish analyst valuing it at S$5.20 and the most bearish at S$4.24 per share. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Singapore Technologies Engineering's past performance and to peers in the same industry. The period to the end of 2024 brings more of the same, according to the analysts, with revenue forecast to display 8.3% growth on an annualised basis. That is in line with its 8.1% annual growth over the past five years. Compare this with the broader industry (in aggregate), which analyst estimates suggest will see revenues grow 15% annually. So although Singapore Technologies Engineering is expected to maintain its revenue growth rate, it's forecast to grow slower than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. They also upgraded their revenue estimates for next year, even though it is expected to grow slower than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.
With that in mind, we wouldn't be too quick to come to a conclusion on Singapore Technologies Engineering. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Singapore Technologies Engineering analysts - going out to 2026, and you can see them free on our platform here.
You should always think about risks though. Case in point, we've spotted 2 warning signs for Singapore Technologies Engineering you should be aware of, and 1 of them is concerning.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.