Keppel fair value seen higher after $1.4b M1 sale

Estimates for 2026 and 2027 were also lowered by 8% to 9%.

Morningstar has lifted its fair value estimate for Keppel Ltd by 3.5% to $8.90 a share, even as it cut the company’s earnings forecasts for the next three years following the planned sale of M1 Limited.

The investment research firm said Monday that it reduced its 2025 earnings-per-share forecast by 20% due to an expected $222m accounting loss from goodwill and intangible asset write-downs tied to the deal. Estimates for 2026 and 2027 were also lowered by 8% to 9%.

Despite the downward revisions, Morningstar’s equity analyst Xavier Lee said the transaction should reduce Keppel’s capital expenditure needs and improve margins, more than offsetting the earnings hit. Shares closed Monday at $8.58, or 96% of Morningstar’s fair value estimate, which Lee described as “fairly valued.”

The sale of M1, excluding certain carved-out assets, is valued at $1.4b and is expected to free up $1b in cash for debt repayment or new investments.