Singapore Technologies Engineering is likely entering a multi-year earnings upcycle, CGS International analysts say in a research report.

The technology, defense and engineering group expects 2024-2029 net profit CAGR to exceed revenue CAGR by up to 5 percentage points.

The brokerage's analysts cite a better operating leverage and an improved sales mix for their forecast.

The Singapore-listed company's 2029 defense revenue target of S$7.5 billion was also a positive surprise, the brokerage says, adding that it sees this as a reflection of the company's confidence in its growth prospects.

CGS International raises the stock's target price to S$7.40 from S$5.60 with an unchanged add rating.

Shares are 2.2% higher at S$6.52.