Brokers' take

Singtel | Buy Target price: S$3.64 Oct 24 close: S$3.14 DBS Equity Research, Oct 24

Singtel's earnings have possibly bottomed out in Q1 2019 and is expected to grow in financial year 2020 forecasts (after two years of decline) led by Telkomsel, AIS and Globe despite a delay in Bharti Airtel's recovery.

The core business is also likely to be stable as the soon-to-be merger of Vodafone-TPG in Australia and TPG's abysmally low capex in Singapore (about S$66 million so far) have significantly reduced the risk of irrational competition. Singtel is attractive at a 12-month forward price-to-earnings ratio of 16x, a negative standard deviation of its 17x historical average, and offers of 5.5 per cent yield.