Earnings Beat: Singapore Airlines Limited Just Beat Analyst Forecasts, And Analysts Have Been Updating Their Models
Singapore Airlines Limited (SGX:C6L) just released its annual report and things are looking bullish. Results were good overall, with revenues beating analyst predictions by 2.2% to hit S$21b. Statutory earnings per share (EPS) came in at S$0.38, some 9.4% above whatthe analysts had expected. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the consensus forecast from Singapore Airlines' twelve analysts is for revenues of S$21.9b in 2027. This reflects a reasonable 6.6% improvement in revenue compared to the last 12 months. Statutory earnings per share are expected to nosedive 32% to S$0.26 in the same period. In the lead-up to this report, the analysts had been modelling revenues of S$21.3b and earnings per share (EPS) of S$0.34 in 2027. So it's pretty clear the analysts have mixed opinions on Singapore Airlines after the latest results; even though they upped their revenue numbers, it came at the cost of a pretty serious reduction to per-share earnings expectations.
View our latest analysis for Singapore Airlines
There's been no major changes to the price target of S$6.46, suggesting that the impact of higher forecast revenue and lower earnings won't result in a meaningful change to the business' valuation. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. There are some variant perceptions on Singapore Airlines, with the most bullish analyst valuing it at S$7.50 and the most bearish at S$5.50 per share. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.
One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. It's pretty clear that there is an expectation that Singapore Airlines' revenue growth will slow down substantially, with revenues to the end of 2027 expected to display 6.6% growth on an annualised basis. This is compared to a historical growth rate of 23% over the past five years. Compare this to the 43 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.3% per year. So it's pretty clear that, while Singapore Airlines' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.
The Bottom Line
The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Singapore Airlines. There was also an upgrade to revenue estimates, although as we saw earlier, forecast growth is only expected to be about the same as the wider industry. The consensus price target held steady at S$6.46, with the latest estimates not enough to have an impact on their price targets.
With that in mind, we wouldn't be too quick to come to a conclusion on Singapore Airlines. Long-term earnings power is much more important than next year's profits. We have forecasts for Singapore Airlines going out to 2029, and you can see them free on our platform here.
Plus, you should also learn about the 2 warning signs we've spotted with Singapore Airlines .
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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.