Shares in Eagle Cement Corp. are seen to rise with the planned acquisition of the cement maker by San Miguel Corp (SMC), which in turn could see its input costs decline after the deal, analysts said on Wednesday.<\/p>\n\n\n\n
Our View:<\/strong> While this would lead to better margins for SMC as cement is the most crucial raw input for its infra projects, this could be highlighted by PCC (Philippine Competition Commission) in its review as it would allow EAGLE to endure much lower ASPs given SMC\u2019s ability to recuperate lost margin through its infra business, giving it a huge advantage in the industry. We, therefore, think it might take some time to secure PCC\u2019s approval on the deal and there\u2019s always the possibility that it might not push through.<\/p>\n\n\n\n Consequently, it would be more prudent for investors who have existing EAGLE shares to take advantage of the rally induced by the potential deal to sell instead of waiting for the tender offer given the uncertainties in the timeline and the results of PCC\u2019s review. Exiting at our resistance level of P20.00\/share would only result to an opportunity cost of 10%, which we think can be obtained by positioning in our selected picks given current depressed valuation of the market.<\/p>\n\n\n\n Worth noting is that if the deal pushes through, we expect most of the shareholders to subscribe to the TO, making it likely for a delisting of EAGLE. At LTP, EAGLE is already trading at 9.95x FY23E EV\/EBITDA, nearly 1STD above 10-year mean. Chart-wise, support and resistance stand at 16.75 and 20.00, respectively.<\/p>\n","protected":false},"excerpt":{"rendered":" Here’s a commentary on an important issue or event affecting the stock market <\/p>\n","protected":false},"author":11,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[],"class_list":["post-317810","post","type-post","status-publish","format-standard","hentry","category-special-reports","generate-columns","tablet-grid-50","mobile-grid-100","grid-parent","grid-33"],"_links":{"self":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317810","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/users\/11"}],"replies":[{"embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/comments?post=317810"}],"version-history":[{"count":2,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317810\/revisions"}],"predecessor-version":[{"id":320541,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/posts\/317810\/revisions\/320541"}],"wp:attachment":[{"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/media?parent=317810"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/categories?post=317810"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/wp-json\/wp\/v2\/tags?post=317810"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}