Alerts

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.

   John Martin Luciano, CFA

January 5, 2021. The median increase in our 2021 FV estimate is 26.3%. Median capital appreciation potential based on stocks’ current price and our new FV estimate is 33.8%. Because of the changes, our new end 2021 bottom-up target for the PSEi is 8,300. However, even with the adjustment, index heavy weights such as SM, SMPH, AC, ALI, AEV, JGS, and ICT are still expensive. Moreover, corporate earnings will have to grow faster than consensus estimate to support a sustainable increase in share prices. At 8,300, the PSEi would be trading at 22.9X 2021E P/E, which is significantly higher than the index’s historical average P/E of 18X.

   John Martin Luciano, CFA

January 05, 2021.

   George Ching

FPH announced that its board of directors has authorized the conduct of a tender offer to acquire a minimum of 908.5MIl common shares of parent company, Lopez Holdings Corporation (LPZ), representing approximately 20% of the total issued and outstanding common shares of LPZ and up to a maximum of 2.07Bil common shares of LPZ representing approximately 45.56% of the total issued and outstanding common shares of LPZ, from all the shareholders of LPZ excluding the shares owned by its ultimate parent entity, Lopez, Inc. The tender offer will start on January 22, 2021 and end on February 19, 2021 at a price of Php3.85/sh. FPH said it intends to file a petition for voluntary delisting of LPZ from the Main Board of the PSE. The tender offer price represents a 25% premium to LPZ’s last traded price of Php3.08/ sh. FPH will require to spend around Php3.5Bil (20%) to Php8Bil (40%) for the tender offer exercise which will likely be sourced from FPH’s existing cash and internally generated cash flow. We have a BUY rating on FPH with a FV estimate of Php115.3/sh. Given FPH’s 68% ownership in FGEN, we view FPH as a cheaper way to own FGEN. FPH is trading at a huge 62% discount to its market based NAV of Php162/sh. Based on FPH’s market price of Php64.4/sh, upside to our FV estimate is significant at 85%.

   John Martin Luciano, CFA

November 23, 2020. We are revising our FV estimate upwards to Php12.5/sh based on a 0.45X 2021E P/BV, but downgrading our recommendation to a HOLD rating as the upside to our target price is no longer attractive. Note that EW’s share price already rallied significantly since the low in May, rising by 85%. We remain cautious over EW’s large exposure in credit cards and auto loans, which represent a total of 50% of its loan portfolio. We continue to believe that these segments are the most at risk in asset quality deterioration amidst the ongoing pandemic. As such, we expect the bank’s provisions to remain elevated over the next few quarters.