SIA upgraded to overweight by HSBC

Stock Name: SIA
Company Name: SINGAPORE AIRLINES LTD

Research House: HSBC

Price Call: BUY

Target Price: 12.50

HSBC Global Research has upgraded its recommendation on Singapore Airlines to overweight from neutral and raised its target price to $12.50 from $10.28.

HSBC said that after underperforming the MSCI index for Asia Pacific ex-Japan by 15 percent in the past three months, it believes that "compelling value has emerged" and that the downgrade cycle for the company has run out of steam as earning momentum starts to recover.

In addition, SIA is well-positioned due to strong connectivity of Singapore's Changi International Airport among other airports in Southeast Asia as well as the its importance for flights between Europe and Australia.

HSBC also cited SIA's solid balance sheet, which it described as "comfortably the strongest for an Asian airline." The company has estimated net cash of $3.5 billion in 2012, it added.

At 11:14 a.m., SIA shares were up 0.7% at $10.40. The stock fell around a third last year.