Broker: DBS Group Research
Date of Report: 30 April 2026

Excerpt from DBS Group Research report.

Report Summary

• Stock: SATS Ltd (Bloomberg Ticker: SATS SP)
• Action: Maintain BUY
• Target Price: SGD 4.20 (lowered from SGD 4.50)
• Key Idea: SATS is the world’s largest air cargo handler and a leading provider of ground handling and food solutions, with strong positions in both aviation and non-aviation segments. The company has shown resilient earnings, driven by structural cargo growth, share gains, and recovery in aviation volumes.
• Highlights:
  • Core EPS expected to grow at a 14% CAGR over FY26–28F.
  • Earnings for FY27/28F were reduced by 10%/8% due to softer cargo volumes and lower operating leverage, but medium-term growth remains underpinned by resilient cargo demand (especially from AI-related shipments and e-commerce).
  • The company continues to deleverage, targeting annual debt reduction of SGD 100–200mn. Lower funding costs are expected as the Fed cuts rates.
  • Operating margin is targeted at 10% (vs 8.7% in FY25), supported by pricing, scale, and productivity initiatives.
  • Dividend payout ratio is expected to stabilise at 30-40% (lower than the pre-pandemic range).
  • Key risks include a prolonged fuel shock and macro/trade-related slowdowns.
• Implications: Despite near-term softness in cargo, the stock has de-rated sharply, now trading at ~16.2x forward P/E, which is below historical levels. The broker sees this as a compelling risk-reward entry for investors, with potential for re-rating as conditions normalise.

Ticker: SATS SP

above is an excerpt from a report by DBS Group Research. Clients of DBS Group Research can be the first to access the full report from the DBS website : https://www.dbs.com