Alerts

   Paolo Miguel Manansala

March 05, 2024. We are maintaining our BUY rating on MWC with an FV estimate of Php27.9/sh. We think that the rate rebasing exercise, continued expansion, and improved regulatory footing of the company should provide favorable growth for their earnings moving forward. At current prices, the upside to our estimate is significant at 44%.

   Denise Joaquin

March 01, 2024. We currently have a BUY rating on DNL with FV estimate of Php9.2/sh. Moving forward, we expect easing inflation and stronger household spending to sustain earnings recovery. We also like the stock given the improving outlook for Chemrez in light of the energy department’s renewed push to hike the minimum biodiesel blend requirement. Furthermore, DNL’s long-term growth prospects remain attractive as we expect the significant capacity expansion from its new Batangas facility will allow DNL to scale its export business over the next few years.

   Frances Rolfa Nicolas

March 01, 2024. We have a BUY rating on SCC with a FV estimate of Php52.1/sh. SCC is trading at 5.9X FY24 P/E, below its 10 year historical P/E of 11.6X. Based on its actual 2023 cash dividend of Php7/sh, this provides a very high dividend yield of 21%. Upside to our FV estimate is also very high at 61%.

   Charmaine Co

February 29, 2024. We are maintaining our BUY rating on MBT with a FV estimate of Php87.0/sh, based on 1.0x 2024E P/B. With a strong and highly liquid balance sheet, we think that MBT is positioned for growth as economic activity increases and demand for loans goes up. MBT is also very well-capitalized, with one of the highest CET1 ratio among banks. This gives the bank flexibility, not just in growing its loan book, but also in distributing dividends. It currently has the highest dividend yield among banks at 8.5%. Furthermore, the stock is trading at a large discount vs peers at 0.7x P/B (vs BDO – 1.4x and BPI – 1.5x).

   Charmaine Co

February 29, 2024. We currently have a BUY rating on BDO with an FV estimate of Php164.0/sh, based on 1.50x 2024E P/B. We continue to like BDO as we believe it is well-positioned to capture opportunities with the continued growth of the economy, benefiting from a strong, liquid balance sheet and wide branch network. Furthermore, as interest rates stay higher for longer, BDO’s strong deposit franchise will play a significant role in managing NIM and enhancing profitability.

   Richard Lañeda, CFA

February 29, 2024. We reiterate our BUY rating on SM given its robust earnings growth despite global headwinds. There is strong momentum in consumer spending which will benefit SM Retail and the malls of SMPH. Meanwhile, banks continue to have strong balance sheets and delivered strong core business growth. Meanwhile, its portfolio investments continue to improve and are generating meaningful income (9% of total) to the company.

   George Ching

February 28, 2024. Maintaining BUY rating. We have a BUY rating on MER with a FV estimate of Php445.7/sh. We like MER given its predictable and stable cash flow from its power distribution business. We also like MER as its profitability is least vulnerable to the risks facing the power industry (volatility in WESM and commodity prices and unplanned outages) because bulk of its profits come from the distribution business. MER’s is currently trading at 15.5X 2024 P/E, below its 10-year historical average of 17.5X. Based on the actual 2023 cash dividend of Php19.55/sh, this translates to a dividend yield of 5.2%. Based on MER’s current market price of Php373/sh, upside to our FV estimate is significant at 19.5%.

   Richard Lañeda, CFA

February 22, 2024. We maintain our BUY rating on ALI with a fair value estimate of Php40.50. Earnings growth was strong last year despite higher interest rates. This year, expectations are for rates to come down in the second half and this should benefit the biggest residential developer in the Philippines. Meanwhile, the malls segment remains robust, and the office leasing segment continues to improve despite a difficult operating environment. Overall, we believe ALI to be a major beneficiary of lower interest rate expectations this year.

   Richard Lañeda, CFA

February 20, 2024. We maintain our BUY rating on SMPH with a fair value estimate of Php43.20. We maintain our BUY rating on SMPH for its dominance in the mall segment, which has capitalized on the strength of the consumer sector. The mall segment has so far been very resilient in the face of higher interest rates and high inflation. Meanwhile, SMPH’s residential revenues are holding up well and cancellations seem to have normalized. Nevertheless, we are keeping an eye on this space given the slowing take-up sales.

   Charmaine Co

February 08, 2024. We currently have a HOLD rating on BPI with an FV estimate of Php116.0/sh based on 1.40x 2024E P/BV. We expect to see sustained growth in the bank’s portfolio as the economy continues to recover and grow. This should be further fuelled by its aggressive customer acquisition strategies and agency banking push. We also expect BPI to benefit from having a substantial low-cost deposit base as interest rates stay elevated. BPI’s merger with Robinsons Bank Corporation (RBC) should also provide opportunities to further expand its lending business, given RBC’s ties with to the Gokongwei group. Nevertheless, there is limited upside to our FV estimate at the stock’s current price.