Alerts

   George Ching

May 07, 2025. Reducing estimates, maintain BUY rating. We are reducing our FY25E earnings forecast for SCC by 20.5% to Php17.5Bil due to weaker than expected net income contribution from the coal segment. We are also lowering our FV estimate by 13.5% Php46.1/sh. We are mantani8ng our BUY rating on SCC. SCC is trading at 7.9X FY25 P/E, below its 10 year historical P/E of 11.6X. Based on its actual 2024 cash dividend of Php6/sh, this provides a very high dividend yield of 18.5%. Upside to our FV estimate is also significant at 41.8%.

   Denise Joaquin

May 06, 2025. Reiterate BUY rating. Despite our sluggish near-term outlook for the stock, with earnings likely reflecting tough comparables in the next few quarters, we reiterate our BUY recommendation as we believe that valuations remain deeply discounted. We estimate that WLCON is trading at only 11.9X 2025E P/E, versus our target multiple of 20.7X.

   Denise Joaquin

May 05, 2025. We are realigning our estimates on RRHI in light of its first quarter results. We have revised our net income forecasts downward by 7.1% to Php6.3Bil for FY25 and 7.5% to Php6.9Bil for FY26, primarily due to higher assumed losses from associates. Nonetheless, our core income forecasts were largely unchanged at Php6.3Bil and Php6.6Bil, respectively. As a result of the changes in our forecasts, our FV estimate slightly declined to Php82.90/sh from Php83.50/sh previously. Hence, we maintain our BUY rating on the stock. We view RRHI as a potential value play with an anticipated turnaround in earnings should private consumption recovery and wage hikes boost discretionary consumer spending. RRHI’s welldiversified portfolio of retail formats in both staples and consumer discretionary should also enable it to capture a broad consumer base and weather economic cycles. We also estimate that RRHI’s dividend payout – which is usually declared in May – also offers an attractive yield of ~5.1% at current prices.

   Charmaine Co

May 02, 2025. We maintain our BUY rating on BPI with an FV estimate of Php144.0/sh, based on 1.55x 2025E P/B. Our positive outlook on BPI is driven primarily by its robust ROE and compelling long-term growth potential. We expect continued portfolio growth, fueled by the bank’s agency banking push and aggressive customer acquisition strategies. It’s strong ties to the Ayala and Gokongwei groups should further support business expansion. While the BSP’s rate cuts will continue to put pressure on NIM, we believe that BPI’s will remain resilient, backed by the reduction in RRR and rapid growth in its consumer loan portfolio.

   George Ching

April 29, 2025. Downgrading to HOLD rating. We are downgrading our rating on MER to HOLD from BUY. We continue 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 15.4X 2025 P/E, below its 10-year historical average of 17.5X. Based on the actual 2024 cash dividend of Php21.5/sh, this translates to a dividend yield of 3.9%. However, MER’s share price has increased by 49% in the past 12 months, outperforming the PSEI’s 7.7% decline during the same period. Based on MER’s current market price of Php548/sh, upside to our FV estimate is limited at 2.6%.

   Denise Joaquin

April 14, 2025. Lowering FV estimate to Php32.80/sh. We are lowering our FV estimate on CNPF to Php32.80/sh from Php34.40/ sh (-4.7%) previously as we temper our revenue and earnings expectations. Specifically, we reduced our revenue estimates to Php80.7Bil (-1.3%) for FY25 and Php87.9Bil (-2.1%) for FY26. Our updated projections assume a 10% growth in branded sales and a mid-single-digit decline in OEM sales. As a result, our net income forecasts decreased to Php6.9Bil (-2.1%) for FY25 and Php7.5Bil (-4.2%) for FY26. Our revised FV estimate implies a target P/E multiple of 16.8X, compared to current market pricing of 17.9X. At current prices, we believe the stock is fairly valued and maintain our HOLD rating.

   George Ching

April 08, 2025. Maintaining BUY rating. We have a BUY rating on FGEN with a FV estimate of Php32.15/sh. We continue like FGEN given its relatively stable cash flow since bulk of its capacity is contracted. Furthermore, with the Department of Energy’s moratorium on new coal power plants, this increases competitiveness of FGEN’s gas and renewables plants, and improve the feasibility of FGEN’s LNG regasification project which will enable its gas plants to remain viable after the depletion of the Malampaya gas field. At FGEN’s market price of Php16.20/sh., upside to our FV estimate is at 98%.

   Denise Joaquin

April 07, 2025. Cutting FV estimate to Php9.10/sh; maintain BUY In light of the subdued consumer environment and persistent cost pressures that could weigh on near-term profitability, we are revising our FV estimate on PIZZA to Php9.10/sh from Php11.8/sh previously. Despite our higher SWS projections, we trimmed our GPM forecasts by 70bps and 120bps, respectively, as we believe margin recovery could be capped by raw material cost volatility. Nonetheless, we maintain our BUY rating on the stock as potential capital appreciation relative to our FV estimate remains attractive at 33.8%. Still, we note that results have consistently missed expectations, which could keep sentiment on the stock subdued until a visible recovery in the company’s bottom-line materializes.

   Paolo Miguel Manansala

March 31, 2025. Maintaining BUY rating. We are maintaining our BUY rating on CEB amid its recent performance. We continue to like CEB for its substantial foothold in the air travel industry. As of 2024, CEB holds 54.1% of the domestic market, solidifying its position as the primary airline in the country. However, we also note some key risks for CEB as changes in global policy could affect its profitability moving forward. Note that two thirds of CEB’s costs are dollar denominated, making it vulnerable to the strength of the dollar. Nevertheless, at current prices, capital appreciation to our FV of Php45/sh is already significant at 32.6%.

   Paolo Miguel Manansala

March 31, 2025. Maintaining BUY rating; slightly reducing FV estimate. We are maintaining our BUY rating on JGS despite the slight reduction in our FV to Php32.9/sh (-3.2%), as we account for the changes made to our FV for each core subsidiary. We continue to like JGS for its significant stake in market leading subsidiaries such as URC and CEB. Moreover, we also note that at JGS’s current price, the discount to our NAV estimate is already significant at 67.1%. Potential headwinds for the company moving forward would most likely include the continued loss of JGSOC, RLC’s softening residential demand, and lower contributions from URC’s SURE segment. On the other hand, a resolution to any of these headwinds could serve as a positive catalyst for the share price.