SATS faces a potential earnings hit in FY 2026 from trade disruptions, DBS Group Research's Jason Sum says in a report.

DBS becomes more cautious on SATS's near-term outlook owing to headwinds in its air-cargo division stemming from tariffs and the imminent elimination of de minimis tax exemptions in the U.S.

DBS cuts its core EPS estimates for SATS by 3% for FY 2025 and by around 13% for FY 2026 and FY 2027 to reflect trade disruptions and negative operating leverage.

It trims the target price to S$4.00 from S$4.40. However, the negatives seem priced in, says DBS, which maintains a buy rating.

Shares are 4.1% lower at S$3.06.