Singapore Stock Market News

ST Engineering - Good entry point

StockFanatic
Publish date: Wed, 28 Aug 2013, 10:50 PM
StockFanatic
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We see a buying opportunity from the recent pullback of STE's share price. Business fundamentals remain strong but we see STE benefiting from the strengthening of the US$ with positive translation of earnings. Dividend yield has also become more attractive at 4.8%.

Maintain Outperform and target price, still based on blended valuations (P/E, DCF, Dividend yield). Given expected earnings growth of 10% for FY13, we view the current valuation of 17.5x as unjustified as it is below its pre-GFC range of 20-22x (with steady earnings growth of 11%). Key catalysts include sustained US$ strength and stronger margins from aerospace.
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