SIA share price to race past $10?
On 22 November 2022, I wrote that SIA share price could continue its bullish form in 2023. Indeed, the counter went on a rampage, surging from $5.45 to the recent $7.30. Year-to-date, SIA share price had rocketed nearly 33%, putting to rest any lingering doubts of another false dawn for the Singapore carrier.
The explosive form of SIA share price came on the back of the announcement of record profits in its 76-year history. The Group recorded a massive net profit of $2.1 billion for FY2022/23, an incredible turnaround from the loss of $948 million incurred in last year. Revenue surged to $17.8 billion, up from $7.6 billion. The ultra-stellar result led to the Group rewarding its staff with staff bonus of up to 8 months. The gesture of goodwill was to reward the staff for their sacrifice (pay cuts) made during the pandemic.
Evidently, SIA’s decision to shore up liquidity and reinstate capacity paid dividend as the airline was the first to capitalize on the pent-up demand for air travel. In March 2023, the passenger capacity reached 79% of pre-COVID levels. Question now: is SIA share price getting ahead of its fundamentals?
Given that the EPS is $0.35, SIA share price is currently being traded at PE of 20.9, which is on the high side.
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