C6L: Passenger Strength And Softer Cargo Will Support Steady Future Earnings

Analysts have nudged their price target for Singapore Airlines slightly higher, citing marginal improvements in discount rate, revenue growth expectations, profit margin assumptions, and future earnings multiples that together support a modest uplift in the stock's estimated fair value to about $6.17.

What's in the News

• October 2025 traffic figures showed stronger passenger performance, with available seat capacity up to 15,599.3 km million and revenue passenger km rising to 13,622.7 km million. This lifted passenger load factor to 87.3 from 86.0 a year earlier (company operating statistics).
• Cargo performance in October 2025 weakened, as cargo and mail carried fell to 92.2 million kg from 96.6 million kg and cargo load factor slipped to 53.5% from 59.1% a year ago, highlighting softness in freight demand (company operating statistics).
• For the second quarter ended 30 September 2025, passengers carried increased to 10.5 million from 9.6 million, with passenger load factor improving to 87.9% from 85.8%. This reflected sustained travel demand and better capacity utilization (quarterly results).
• In the first half of FY2025, passengers carried rose to 20.8 million from 19.2 million and passenger load factor edged up to 87.7% from 86.4%, while cargo load factor eased to 56.5% from 57.4%. This indicated a mix of robust passenger trends and softer cargo yields (half year results).
• The board proposed an interim dividend of 5 cents per share and a special dividend of 3 cents per share for the half year ended 30 September 2025, payable on 23 December 2025 to shareholders on record as of 8 December 2025 (company dividend announcement).

Valuation Changes

• Fair Value Estimate is maintained at approximately SGD 6.17 per share, indicating no material change in the stock's assessed intrinsic value.
• The Discount Rate edged down slightly from about 8.58% to 8.57%, reflecting a marginally lower perceived risk or cost of capital.
• The Revenue Growth Assumption eased marginally from roughly 1.73% to 1.73%, implying a very small downward adjustment to long term topline expectations.
• The Net Profit Margin was trimmed slightly from about 5.15% to 5.15%, signaling a modestly more conservative view on future profitability.
• The Future P/E Multiple was reduced fractionally from around 26.81x to 26.80x, pointing to a negligible recalibration of valuation multiples applied to forward earnings.