Morningstar lifts SGX fair value estimate to $14.50

SGX’s FY2025 adjusted net profit after tax rose 16%.

Morningstar has lifted its fair value estimate for Singapore Exchange Ltd. (SGX) by 4% to $14.50, citing the time value of money, but cautioned that the stock appears overvalued at its current market price of $16.34.

The investment research firm noted SGX’s FY2025 adjusted net profit after tax rose 16%, driven by a 12% increase in net revenue and disciplined cost management.

Volatility-exposed business segments — which account for more than half of the group’s revenue — benefited from the U.S. presidential election and turbulence in global markets fueled by trade and tariff disputes.

Foreign exchange volumes surged by more than 50% amid a weakening U.S. dollar, whilst equity derivatives volumes, SGX’s largest segment, climbed 10% YoY.

Despite the strong results, Morningstar analyst Roy Van Keulen cautioned against assuming these gains will persist, arguing that FY2025’s exceptional conditions, including political shocks and shifts in trade policy, set “a high bar” for volatility.

SGX retains a wide economic moat and is expected to benefit from heightened geopolitical tensions and the resulting demand for hedging products. However, with shares trading at 1.13 times Morningstar’s fair value estimate, the research house rates the stock as overvalued.

Forecasts point to revenue growing from $1.37b in 2025 to $1.94b by 2030, with earnings per share increasing from $0.60 to $0.85 over the same period. SGX’s dividend payout ratio is projected to remain around 62%, with steady increases in per-share dividends.

Morningstar’s ESG assessment rates SGX’s overall risk as low (19.3), with average risk management compared to global peers.