Shares of Keppel Ltd (SGX:BN4) continued their upward trajectory on Tuesday, advancing 2.6% to S$12.42 during afternoon trading. This positive movement builds upon momentum established last week following the conglomerate's financial disclosures and a proposed special dividend distribution.
The company recently reported a full-year net profit of S$1.1 billion for FY2025, a result management has framed as ushering in an era for a "New Keppel." In conjunction with these earnings, the board recommended total dividends of approximately 47 Singapore cents per share for the fiscal year. This includes a special component comprising a 2-cent cash payment per share and an in-specie distribution of one Keppel REIT unit for every nine Keppel shares held.
In response to the robust results, several brokerage firms have revised their valuation targets for the stock upward, with some analysts setting objectives near the S$14 mark. Phillip Securities, maintaining a "buy" recommendation, increased its target to S$13.80. Similarly, CGS International raised its target to S$13.52 while reiterating an "add" rating. Analysts cited several supportive factors, including anticipated earnings growth driven by asset management fees, a favorable interest rate environment, and successful cost-reduction initiatives.
Trading activity remained elevated, with roughly 4.09 million shares changing hands on Tuesday. The stock traded within a range of S$12.05 to S$12.45, significantly outperforming the broader Straits Times Index, which was essentially flat with a marginal decline of 0.06%.
Beyond the dividend, investors are focusing on several near-term catalysts. The company's Annual General Meeting is scheduled for April 17, followed by the record date for the special dividend on April 28, with the payout slated for May 8. Additionally, Keppel highlighted progress on its 600 MW Keppel Sakra Cogen Plant, which is targeting operational commencement in the first half of 2026 and is reported to be fully contracted for both 2026 and 2027.
Market sentiment may also be receiving a mild tailwind from broader macroeconomic developments. The Singapore government has reportedly lifted its 2026 GDP growth forecast to a range of 2% to 4%, citing stronger global economic momentum and rising demand linked to artificial intelligence sectors.
However, some cautionary notes persist. The market has likely priced in a significant portion of the positive news. The value of the REIT unit component of the special dividend will fluctuate with Keppel REIT's market price up until the entitlement date. Furthermore, any delays in project launches or slower-than-expected asset monetization could temper investor enthusiasm.
The analytical upgrades often employ a sum-of-the-parts valuation methodology, which separately values Keppel's diverse business segments before combining them. The investment thesis centers on the growing contribution of predictable, recurring fee-based income and contracted infrastructure cash flows, while the proportion of more volatile legacy earnings diminishes within the overall portfolio mix.