Why analysts see StarHub as a 'resilient stock'

Is it because of the football hubbub?

According to Barclays, they believe the resilient 4.8% yield and stable earnings are the primary drivers of the stock's resilience – this is not likely to change in the near term.

The recent regulatory decision on football content is a marginal positive, although it likely stems from pay TV market share leakage.

Here's more from Barclays:

We continue to struggle to find reasons to own the stock at these levels. StarHub is the most expensive of the three Singapore telecom stocks and the implied 4.8% yield is similar to the peer group.

Our DCF-based PT increases to S$3.50 from S$3.15, driven by modestly higher topline growth assumptions and as we roll forward the DCF valuation basis to YE14 from YE13.

We use a WACC of 7.8%, and long-term growth rate of 0%, in turn implying a terminal-year FCF multiple of 12.8x.

Risks: 1) higher enterprise revenue share accretion into NGNBN adoption, with margin delivery as well, which could then lead to upward earnings revisions; and 2) a higher-than-expected cash return to equity through a capital reduction.

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