SATS Seems Poised to Buck Air Cargo Downturn, DBS Group Research Says

Dow Jones11-19

SATS is likely to buck a downturn in the air cargo industry next year, says its bull at DBS Group Research. The Singapore air-cargo handler has outpaced the broader market in cargo tonnage growth for several quarters, analyst Jason Sum writes in commentary.

"While the degree of outperformance may narrow over time, we still expect SATS to grow ahead of the sector," he says. Trade deals to reduce tariffs could ease pressure on global trade, while AI-related goods should underpin global air-cargo demand, he adds.

Sum believes most downside risks are priced into SATS's shares, which are trading at a discount to other Singapore aviation-related names. DBS raises its target to S$4.00 from S$3.80 and maintains a buy rating. The stock is down 1.15% at S$3.44.

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