Forecast: Analysts Think Singapore Airlines Limited's (SGX:C6L) Business Prospects Have Improved Drastically

Singapore Airlines Limited (SGX:C6L) shareholders will have a reason to smile today, with the analysts making substantial upgrades to this year's statutory forecasts. Consensus estimates suggest investors could expect greatly increased statutory revenues and earnings per share, with the analysts modelling a real improvement in business performance.

After the upgrade, the eleven analysts covering Singapore Airlines are now predicting revenues of S$16b in 2023. If met, this would reflect a sizeable 116% improvement in sales compared to the last 12 months. The losses are expected to disappear over the next year or so, with forecasts for a profit of S$0.32 per share this year. Previously, the analysts had been modelling revenues of S$15b and earnings per share (EPS) of S$0.16 in 2023. There has definitely been an improvement in perception recently, with the analysts substantially increasing both their earnings and revenue estimates.

See our latest analysis for Singapore Airlines

Although the analysts have upgraded their earnings estimates, there was no change to the consensus price target of S$5.82, suggesting that the forecast performance does not have a long term impact on the company's valuation. There's another way to think about price targets though, and that's to look at the range of price targets put forward by analysts, because a wide range of estimates could suggest a diverse view on possible outcomes for the business. Currently, the most bullish analyst values Singapore Airlines at S$6.80 per share, while the most bearish prices it at S$4.30. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. For example, we noticed that Singapore Airlines' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 116% growth to the end of 2023 on an annualised basis. That is well above its historical decline of 20% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 24% per year. So it looks like Singapore Airlines is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest takeaway for us from these new estimates is that analysts upgraded their earnings per share estimates, with improved earnings power expected for this year. They also upgraded their revenue estimates for this year, and sales are expected to grow faster than the wider market. The lack of change in the price target is puzzling, but with a serious upgrade to this year's earnings expectations, it might be time to take another look at Singapore Airlines.

Still, the long-term prospects of the business are much more relevant than next year's earnings. At Simply Wall St, we have a full range of analyst estimates for Singapore Airlines going out to 2025, and you can see them free on our platform here..

Of course, seeing company management invest large sums of money in a stock can be just as useful as knowing whether analysts are upgrading their estimates. So you may also wish to search this free list of stocks that insiders are buying.

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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.