StarHub - Starhub lifted to Hold by Citi; Target raised to $2.45

Stock Name: StarHub
Company Name: STARHUB LTD
Research House: Citigroup

Citigroup upgrades Starhub (CC3.SG) to Hold from Sell, lifts target price to $2.45 from $2.15 after reducing long-term capex assumptions, says Dow Jones.



Citigroup expects capex-to-sales ratio to normalse to 10%-11% from FY11 after peaking at 14% in FY10 as telco now in process of building its infrastructure to tap on Singapore’s high-speed national broadband network: “Dividends are thus better matched against free cashflow generation over the longer term, allowing sustainable (dividend) payout of $0.20/year.”



But notes valuation remains expensive while earnings growth still lacking. Shares off 0.4% at $2.48.