Singtel Stock Outlook 2026: UBS Downgrade, Data Centre Mega‑Deal and Dividend Growth After a 50% Rally

Data and prices are as of the close on 1 December 2025 unless otherwise stated.

Key takeaways on Singapore Telecommunications Limited (Singtel, SGX: Z74)

• Share price near decade highs: Singtel trades around S$4.73 per share, up roughly 50% in 2025, lifting its market capitalisation to about S$78 billion. ^[1]
• UBS just turned cautious: On 1 December 2025, UBS cut Singtel from “Buy” to “Neutral” with a price target of S$4.40, saying the 2025 rally has largely priced in its asset‑recycling and dividend story. ^[2]
• Profits and guidance are improving: For H1 FY2026 (half‑year to 30 September 2025), underlying net profit rose 14% to S$1.35 billion, and Singtel raised full‑year operating profit guidance to high single‑digit to low double‑digit growth. ^[3]
• Data centres & AI in focus: Singtel’s Nxera arm is building a 58MW “AI‑ready” data centre in Tuas and expanding across Thailand, Indonesia and Malaysia. It has secured a S$643 million green loan and is in advanced talks with KKR to buy >80% of ST Telemedia Global Data Centres (STT GDC) for over S$5 billion, in what could be one of Asia’s largest data‑centre deals. ^[4]
• Dividend still growing: The board declared an interim dividend of 8.2 Singapore cents per share (6.4 cents core + 1.8 cents “value realisation” dividend), up 17% year‑on‑year. Trailing 12‑month dividends of S$0.182 per share imply a yield of about 3.8–3.9% at current prices. ^[5]
• Optus remains a key risk: In September 2025, Singtel’s Australian subsidiary Optus suffered emergency‑call outages linked to at least four deaths, triggering investigations, political scrutiny and fresh reputational risk. ^[6]

Below, we break down the latest news, forecasts and analysis around Singtel stock as of 1 December 2025, and what it could mean for investors heading into 2026.

Singtel share price and valuation snapshot (1 December 2025)

After years of trading like a “bond proxy”, Singtel’s share price has roared back in 2025. UBS estimates the stock is up around 50% year‑to‑date, helped by a structural reset of its strategy, strong associate contributions and excitement around its digital‑infrastructure arm. ^[7]

At around S$4.73, Singtel currently trades at: ^[8]

• Market capitalisation: ~S$78 billion
• Trailing P/E: ~12.8x (EPS about S$0.37)
• Forward P/E: ~26–27x based on current consensus earnings, inflated by large one‑off gains falling out of the base year
• Dividend yield (trailing 12 months): ~3.8–4.0%, depending on the source and price used
• Price‑to‑book: ~2.9–3.0x

In other words, Singtel today trades more like a growth‑plus‑income stock than a deep‑value telco: its yield is lower than many ASEAN peers, but investors are paying up for its data‑centre and AI‑infrastructure story, plus a more aggressive capital‑return framework.

Latest news: UBS downgrade, strong half‑year results and mega data‑centre deal talk

1. UBS downgrade on 1 December 2025

On the morning of 1 December 2025, UBS downgraded Singapore Telecommunications Limited from “Buy” to “Neutral”, while keeping its target price at S$4.40. ^[9]

The UBS note highlights:

• The stock’s ~50% rally in 2025 as a key reason to turn more cautious on valuation.
• Investor enthusiasm around asset recycling, Airtel stake sales and rising dividends, which the market has largely priced in.
• Forecast dividend yields of about 3.9% (FY2026) and 4.2% (FY2027) versus an ASEAN telco sector average around 5%, suggesting less yield support from here.

UBS essentially argues that fundamentals remain solid, but future returns look more balanced after the sharp re‑rating.

2. H1 FY2026 results: profit surge, higher guidance and bigger interim dividend

On 11–12 November 2025, Singtel reported a 14% rise in underlying net profit for the half‑year to 30 September 2025, reaching S$1.35 billion versus S$1.19 billion a year earlier. ^[10]

Key highlights from H1 FY2026:

• Net profit: Jumped to S$3.40 billion, boosted by around S$2.05 billion of exceptional gains mainly from the partial sale of Bharti Airtel and the Intouch–Gulf merger. ^[11]
• Operating performance:
  • Operating company EBIT (OpCo EBIT) grew 13–14% in constant currency terms. ^[12]
  • Strong contributions from Optus (EBIT up ~27%), NCS (EBIT up over 40%) and regional associates including Bharti Airtel and AIS. ^[13]
• Guidance upgrade: Management now expects OpCo EBIT to grow from “high single digit” to a range of “high single digits to low double digits” for FY2026 (year ending 31 March 2026). ^[14]
• Interim dividend:
  • Core interim dividend: 6.4 cents
  • Value realisation dividend (VRD): 1.8 cents
  • Total interim:8.2 cents per share, up 17% year‑on‑year and representing about 78% payout of H1 underlying net profit. ^[15]

Telecom Review Asia notes that since launching its Singtel28 (ST28) plan, the group’s active capital management has generated about S$5.6 billion in proceeds, including S$1.5 billion from the recent Airtel divestment, achieving more than half of its S$9 billion mid‑term asset recycling target. ^[16]

3. Bharti Airtel stake sales and asset recycling

Singtel has used its associate holdings as a major lever to fund growth and shareholder returns:

• May 2025: Singtel sold roughly 1.2% of its direct stake in Bharti Airtel via private placement, raising about Rs 13,180–13,182 crore (around S$1.4–2.0 billion), realising an estimated gain of S$1.1–1.4 billion. ^[17]
• November 2025: Singtel sold an additional 0.8% stake in Airtel for about S$1.5 billion, cutting its holding to around 27.5%. ^[18]

Combined with other disposals, these deals support:

• The S$9 billion asset‑recycling target under the ST28 plan. ^[19]
• A S$2 billion share‑buyback programme and ongoing value‑realisation dividends on top of core payouts. ^[20]

4. Potential S$5+ billion STT GDC acquisition – a swing factor for Nxera

A major talking point in late 2025 is the potential acquisition of ST Telemedia Global Data Centres (STT GDC):

• Reuters reported that KKR and Singtel are in advanced talks to acquire more than 80% of STT GDC for over S$5 billion (≈US$3.9 billion), which would give them full ownership, in what could be one of Asia’s largest data‑centre transactions. ^[21]
• STT GDC operates 100+ data centres across Asia and Europe, giving Singtel’s Nxera an immediate step‑change in scale if the deal closes. ^[22]
• Tech and industry commentary suggests such a transaction would “transform Singtel’s Nxera overnight”, dramatically expanding its footprint and AI‑ready capacity, though deal terms and timing remain uncertain. ^[23]

This sits squarely within Singtel’s pivot from being viewed as just a telco to being priced partly as a digital‑infrastructure and AI‑data‑centre play.

5. Nxera, DC Tuas and green financing

Alongside M&A ambitions, Singtel is investing heavily in organic data‑centre growth via Nxera:

• DC Tuas (Singapore):
  • A new 58MW AI‑ready data centre in Tuas, designed for high‑density AI workloads. ^[24]
  • Funded by a S$643 million green loan from a consortium of banks, aligned with Singapore’s sustainable‑finance taxonomy. ^[25]
  • Expected to be operational in 2026. ^[26]
• Regional build‑out:
  • A 25MW data centre in Thailand that began operating in June 2025. ^[27]
  • A hyperscale, AI‑ready campus in Batam (Indonesia), being built with Telkom’s NeutraDC. ^[28]
  • A new data centre in Johor, Malaysia, via a joint venture with Telekom Malaysia, targeting a 2026 launch. ^[29]

Singtel expects Nxera’s EBITDA to grow at more than 20% annually for at least the next four years, as new capacity comes online. ^[30]

6. 5G, AI and enterprise momentum

On the network and enterprise side, Singtel is trying to reinforce its lead:

• It has launched “5G+”, combining 5G Standalone with new spectrum, and is using 5G network slicing commercially at major events like Singapore’s National Day Parade and Formula 1, before extending use cases to healthcare, airports and ports. ^[31]
• Singtel received Frost & Sullivan’s 2025 APAC “Company of the Year” in 5G Enterprise, recognising its role in developing 5G solutions for businesses. ^[32]
• Singtel is embedding AI across its operations, aiming to make its entire workforce “AI‑ready” and to use AI for cybersecurity, customer service and new digital business lines (including RE:AI, its GPU‑as‑a‑service platform). ^[33]

These initiatives are central to the ST28 plan, which positions Singtel as a connectivity + digital‑infrastructure + IT‑services platform rather than a traditional telco.

7. Optus outages: a serious overhang

The key negative news in 2025 has been from Singtel’s wholly‑owned Australian subsidiary Optus:

• On 18 September 2025, Optus experienced a 13‑hour emergency‑call outage affecting around 600 failed Triple‑Zero calls, with at least four deaths linked to customers who could not reach emergency services. ^[34]
• Singtel’s CEO Yuen Kuan Moon issued a public apology, saying the group was “deeply sorry” and cooperating with regulators and an independent review. ^[35]
• A second emergency‑call disruption later in September deepened the crisis, prompting Australia’s communications minister to question Optus’s ability to run critical infrastructure and to call for stronger oversight. ^[36]
• Separately, Optus was hit with a A$100 million fine for past “appalling” sales practices targeting vulnerable customers, adding to regulatory and reputational pressures. ^[37]

While Optus delivered 27% EBIT growth in H1 FY2026 thanks to better mobile economics and higher network‑sharing revenue, analysts and regulators remain focused on governance, resilience and compliance. ^[38]

For Singtel shareholders, Optus is a double‑edged sword: it contributes meaningfully to earnings, but also introduces regulatory, operational and reputational risk that could influence future capex and capital returns.

Singtel28 (ST28): how the strategy reshapes earnings and returns

Launched in 2024, Singtel28 (ST28) is the group’s multi‑year growth and capital‑allocation plan. ^[39]

Key pillars:

1. Lift business performance
   • Strong OpCo EBIT growth: Investor Day materials show OpCo EBIT rising from about S$1.2 billion in FY2024 to S$1.4 billion in FY2025, with margins improving, and further gains in Q1 FY2026. ^[40]
   • A S$0.6 billion cost‑out programme targeted for FY2024–FY2026, including network, IT and operating efficiencies in Singapore and Australia. ^[41]
2. Active capital management and asset recycling
   • Mid‑term recycling target: S$9 billion, with over S$5.6 billion already realised through deals in Indara, Airtel, Nxera and others. ^[42]
   • S$2 billion value‑realisation share‑buyback (VRSB) programme. ^[43]
3. Sustained value realisation for shareholders
   • Core ordinary dividend: 70–90% of underlying NPAT, a relatively high payout policy for a large cap. ^[44]
   • Value realisation dividend (VRD):3–6 cents per share per year on top of the core payout, funded by asset recycling. ^[45]
4. New growth areas at scale
   • Nxera (data centres) as a key earnings growth engine, with targeted >20% EBITDA CAGR as new capacity ramps up. ^[46]
   • NCS (IT and digital services) expanding across ASEAN, including a joint venture in the Philippines to strengthen global delivery capabilities. ^[47]

Overall, ST28 tries to blend steady telco cash flows with higher‑growth digital infrastructure and services, while using asset monetisation to fund both growth capex and enhanced capital returns.

Dividends and capital returns: what can investors realistically expect?

Based on recent announcements and policy:

• FY2025 and YTD FY2026 dividends
  • FY2025 total dividends were about S$0.18 per share (including special/VR components). ^[48]
  • With interim FY2026 dividends at 8.2 cents, the trailing 12‑month payout is around 18.2 cents, implying a trailing yield of ~3.8–3.9% at S$4.73. ^[49]
• Payout ratio and sustainability
  • Some data providers estimate a dividend payout ratio around 50–60%, leaving room for reinvestment and buybacks. ^[50]
  • ST28 explicitly frames the VRD as programmatic but funded from asset recycling, so its continuation depends on further disposals and recycling progress. ^[51]
• UBS vs. local brokers on dividend value
  • UBS sees Singtel’s projected 3.9–4.2% yield in FY2026–27 as modest versus an ASEAN telco average of about 5%. ^[52]
  • Many local houses, however, emphasise total shareholder yield, including buybacks and potential VRDs, not just the ordinary yield.

For income‑oriented investors, Singtel now looks like a moderate‑yield stock with good growth visibility, rather than a high‑yield utility.

What analysts and research houses are saying

Despite the UBS downgrade, sell‑side sentiment on Singtel remains largely constructive.

Consensus price targets

SGinvestors, which compiles broker research on SGX: Z74, shows: ^[53]

• Target prices (recent 3 months): about S$4.10 to S$5.75
• Median target:≈S$5.14
• Average target:≈S$5.22

Based on a current price of S$4.73, that implies roughly 8–10% upside on average, before dividends.

Notable calls include:

• OCBC: Target price around S$5.10–5.75, “Buy” rating, highlighting data‑centre growth and stronger ordinary/VR dividends.
• DBS, Maybank, RHB, UOB Kay Hian and Phillip: Mostly “Buy” or “Accumulate” with targets clustered in the S$4.6–S$5.2 range, citing ST28 execution, Optus recovery potential and attractive risk–reward versus regional peers. ^[54]

TipRanks data shows: ^[55]

• Citi: Previously “Buy” with a S$4.30 target (May 2025), after raising its target from S$3.80 on improved Optus margins and lower cost of capital.
• J.P. Morgan:Overweight, S$4.65 target, emphasising growth from Optus and regional associates.

Tiingo’s news feed meanwhile notes that Citi has more recently shifted Singtel to “Neutral”, suggesting some foreign houses are turning cautious after the re‑rating, in line with UBS. ^[56]

Independent and retail‑oriented analysis

• Telecom Review Asia emphasises Singtel’s improving underlying profit, Nxera’s >20% targeted EBITDA CAGR and a strong balance sheet, while acknowledging Australian uncertainties. ^[57]
• Local investor sites like The Smart Investor argue Singtel remains a resilient dividend stock with long‑term upside from data centres and associates, but warn that the 2025 share‑price run‑up has reduced the margin of safety. ^[58]
• Growbeansprout highlights Singtel as one of the top performers in the Straits Times Index, driven by its strong H1 results, higher dividends and share buyback plans. ^[59]

In short, consensus is still positive, but valuation, Optus risks and execution of the data‑centre strategy are now much more central to the debate.

Key risks for Singtel stock in 2026

Investors weighing Singapore Telecommunications Limited stock should watch several risk areas:

1. Regulatory and reputational fallout at Optus
   • Investigations into the emergency‑call outages could result in fines, mandated capex or operational constraints. ^[60]
   • Ongoing negative headlines may impact customer churn and pricing power in Australia.
2. Execution risk in data centres and potential STT GDC deal
   • Large M&A transactions can strain balance sheets and management bandwidth.
   • Data‑centre valuations in Asia are rich; overpaying or under‑utilising capacity would compress returns. ^[61]
3. Macro and interest‑rate environment
   • As a partial income play, Singtel’s valuation is influenced by bond yields. If rates stay higher for longer, investors may demand higher yields from telcos.
4. Foreign‑exchange and associate exposure
   • A meaningful chunk of earnings comes from Bharti Airtel, AIS, Telkomsel and Globe, all exposed to local FX and regulatory regimes. ^[62]
5. Valuation after a strong rally
   • With trailing P/E around 12–13x and a mid‑3% yield, Singtel is no longer the cheap recovery story it was in 2023–24. Future upside is more dependent on delivering growth from Nxera, NCS and Optus, and on continued disciplined capital management.

Singtel stock forecast: what could 2026 look like?

Putting the various pieces together:

• Earnings trend:
  • Underlying profit is growing in the mid‑teens for now, driven by Optus margin recovery, associate strength and NCS. ^[63]
  • Management’s upgraded guidance suggests another year of healthy EBIT growth in FY2026, barring major shocks.
• Data centres and AI:
  • Nxera’s pipeline – DC Tuas, Thai, Batam and Johor data centres – plus a possible STT GDC deal, set Singtel up as a regional AI‑ready data‑centre heavyweight, potentially commanding higher valuation multiples if execution goes well. ^[64]
• Capital returns:
  • The core dividend should grow broadly in line with underlying NPAT, while VR dividends and buybacks depend on further asset sales under the S$9 billion recycling plan. ^[65]
• Valuation and price targets:
  • With the stock around S$4.73 and consensus targets in the S$5.00–5.25 range, implied upside is single‑digit to low double‑digit, plus a ~4% yield, assuming forecasts are met. ^[66]
  • UBS and some foreign houses see limited near‑term upside after the re‑rating, while many local brokers still frame Singtel as a core Singapore blue‑chip for 3–5 year investors.

Bottom line: is Singapore Telecommunications Limited stock still interesting after the 2025 rally?

From an information standpoint (not personal advice):

• Bullish case:
  • Singtel offers a combination of stable telco cash flows, growing dividends, and high‑growth exposure to AI‑driven data centres through Nxera, backed by a clear capital‑recycling framework.
  • The ST28 plan is gaining traction, with tangible improvements in EBIT, cost efficiency and asset monetisation.
• Bearish or cautious case:
  • After a ~50% share‑price gain in 2025, a lot of good news around asset recycling and dividends is already in the price.
  • Optus’s operational and regulatory issues represent a real risk, and any mis‑steps in a large STT GDC acquisition could dilute returns.
  • The dividend yield, while growing, is lower than many regional telcos, making the stock sensitive to expectations around growth and interest rates.

For investors following Singapore Telecommunications Limited (Singtel) on the SGX, the stock now looks less like a pure defensive yield play and more like a quality regional digital‑infrastructure platform with moderate income and growth – but with execution and regulatory risks that need to be monitored closely in 2026.

Important: This article is for general informational purposes only and does not constitute financial advice or a recommendation to buy or sell any security. Always do your own research and consider consulting a licensed financial adviser before making investment decisions.

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