Bullish longer term play. I entered a position on SingTel this week as the share price slides.
12-month price target is S$5.30, implying about 22% upside from the latest cited share price of S$4.34, before dividends. Including the FY26 dividend of 18.5 Singapore cents, the total return case is roughly 26%. This is broadly in line with market consensus of about S$5.18 and broker targets around the low-to-mid S$5 range.
My bullish thesis is that the market is over-penalising Singtel for short-term concerns while underpricing three durable drivers: rising associate earnings, capital returns from asset recycling, and the repositioning of Singtel from a mature telco into a regional digital-infrastructure and enterprise-services platform.
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Latest earnings: strong underlying performance, despite share-price weakness
Singtel’s FY26 results were solid. Revenue was stable at S$14.3 billion, EBITDA rose to S$3.8 billion, OpCo EBIT rose 9%, regional associates’ post-tax contribution rose to S$2.0 billion, underlying net profit rose 12% to S$2.8 billion, and reported net profit rose 40% to S$5.6 billion. The reported profit was boosted by exceptional gains, mainly from partial Airtel stake sales.
The most important point for a bullish article is that the growth was not from one source. Optus EBIT grew 23%, NCS EBIT grew 34%, Digital InfraCo EBIT grew 24%, OpCo EBIT grew 10% on constant currency, and regional associate PAT grew 25% on constant currency excluding Intouch. Singtel also met its medium-term ROIC target, with underlying ROIC rising to 11.1% in FY26.
This matters because Singtel is no longer just a slow-growth Singapore telco. The earnings mix now includes Australia, India, Thailand, Indonesia, the Philippines, IT services, data centres, AI infrastructure and enterprise technology services.
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What assets does Singtel own?
Singtel’s portfolio can be split into four buckets.
First, it owns the Singapore core telco and enterprise business, including mobile, broadband, fixed-line, ICT, cybersecurity, enterprise connectivity and government/large-enterprise solutions. This remains cash-generative, but consumer competition is intense.
Second, it owns Optus, Australia’s second-largest telco. Optus delivered FY26 revenue of A$8.3 billion and EBIT of A$550 million, up 23%, helped by mobile growth, postpaid price increases and network-sharing revenue.
Third, it owns NCS and Digital InfraCo. NCS is the IT services and digital transformation arm, with FY26 revenue of S$3.2 billion, EBIT of S$340 million, and record bookings of S$3.8 billion. Digital InfraCo includes assets such as Nxera data centres and RE:AI; its FY26 revenue rose 12% and EBIT rose 24%, with strong demand for new data-centre capacity.
Fourth, Singtel owns major regional associates. Reported stakes include 27.5% in Bharti Airtel, 30.1% in Telkomsel, 46.6% in Globe Telecom, 24.8% in AIS, and 7.7% in Gulf Development. These are strategically important because Airtel and AIS are currently doing much of the heavy lifting in profit growth.
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Asset recycling: the biggest valuation unlock
Singtel has been actively recycling capital out of mature or non-core assets and redeploying proceeds into shareholder returns, debt flexibility and growth areas such as data centres, AI infrastructure and enterprise technology.
The programme has become more ambitious. Under Singtel28, management first set a medium-term asset-recycling target of about S$6 billion, then raised it to S$9 billion. In FY26 alone, Singtel recycled S$3.9 billion of assets and executed S$226 million of value-realisation share buybacks.
A key example is Airtel. Singtel sold a 0.8% stake in Bharti Airtel in November 2025, unlocking S$1.5 billion; Reuters reported this as part of Singtel’s S$9 billion asset-recycling programme, with Singtel’s Airtel stake reduced to 27.5% from 31.4% in 2022.
The bullish interpretation is simple: Singtel owns listed and valuable assets that can be monetised without destroying the core investment case. Airtel has appreciated substantially, and partial stake sales allow Singtel to crystallise value, fund growth, pay dividends, buy back shares and potentially reduce debt.
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Why did the stock fall over the last two weeks?
The correction looks more technical and sentiment-driven than thesis-breaking. Singtel fell from S$5.02 on 20 May 2026 to S$4.34 on 29 May 2026, a drop of about 13.5% in roughly two weeks. The sharpest fall came after FY26 results, when the stock fell 6.37% on 21 May and continued sliding.
There are four likely reasons.
First, expectations were high. Singtel had rallied strongly before results, so even good results were not enough. Reuters noted that the stock dropped nearly 7%, its steepest fall since March 2020, after FY26 results, partly as results missed analyst expectations and management gave more modest EBIT growth guidance.
Second, investors focused on weaker Singapore trends. Singtel Singapore revenue fell 3.1% and EBIT fell 4.6%, reflecting consumer price competition and higher spectrum amortisation.
Third, FY27 capex is rising. Reuters reported that Singtel laid out a S$3 billion capital spending plan for FY27, including S$1.2 billion for data centres and AI-related purposes. Higher capex can worry income investors, even when the spending is growth-oriented.
Fourth, the transfer of Singtel Special Discounted Shares from CPF Board to CDP accounts may be creating temporary selling pressure. Singtel’s own slides say SDS holders can sell anytime after transfer, while Beansprout reported that about 120,000 holders may choose to cash out.
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Dividend: attractive and increasingly supported by capital management
Singtel declared its highest-ever ordinary dividend of 18.5 cents per share for FY26, up 9% year on year. This comprised 13.4 cents core dividend and 5.1 cents value realisation dividend, with the core payout ratio at 80% of underlying NPAT.
At a share price of S$4.34, the FY26 dividend implies a yield of about 4.3%. That is attractive for a blue-chip Singapore stock, especially when paired with potential capital recycling and buybacks.
The key issue is sustainability. The core dividend is supported by underlying earnings, while the value realisation dividend depends on continued asset monetisation. Because Singtel still owns valuable stakes in Airtel and other regional assets, the VRD has a credible runway, although it should not be treated as guaranteed forever.
Bottom line:
At around S$4.34, Singtel offers a roughly 4%+ dividend yield, potential buyback support, exposure to fast-growing Asian telecom assets, and an asset-recycling catalyst. My 12-month target is S$5.30, with a bull case toward S$5.80–S$6.00 if Airtel, NCS and Digital InfraCo continue to deliver.
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