{"id":323303,"date":"2023-05-23T00:46:34","date_gmt":"2023-05-22T16:46:34","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323303"},"modified":"2023-05-23T00:46:36","modified_gmt":"2023-05-22T16:46:36","slug":"stock-in-focus-puregold-price-club-pgold-23-may-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-puregold-price-club-pgold-23-may-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Puregold Price Club (PGOLD) – 23 May 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PGOLD<\/td><\/tr>
Company Name<\/strong><\/td>Puregold Price Club, Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>23 May 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 56.40<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Given the earnings outperformance as well as the stock\u2019s significant upside, we continue to recommend a BUY on PGOLD with a Target Price of P56.40 per share.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Despite declines in margins, earnings still began the year with an outperformance to estimates. Note that the 1st quarter (Q1) is seasonally the weakest quarter and usually accounts for only around 22% of full-year numbers. The main driver for the beat came mainly from cost of sales coming in lower as a percentage relative to our forecasts, vis-a-vis the topline. Though OPEX continued to gain traction, this was somewhat tempered by the declines in non-operating expenses and the effective tax rate.<\/p>\n\n\n\n

Revenues remained healthy, growing by 15.2% on the back of solid same store sales growth (SSSG) from Puregold (+8.8%) and S&R (+16.8%). The company also benefitted from robust improvement in foot traffic, as well as the contributions from more mature stores along with newly-opened ones. As expected though, margins would dip (-90bps) versus a year ago as PGOLD opted not to fully pass on costs to customers. Nevertheless, gross income still landed above expectations, as cost of sales only accounted for 22.4% of our forecasts while revenues were at 22.8%. <\/p>\n\n\n\n

In-line with the trend that we have been noticing recently however, OPEX continued to climb, taking up a heftier 24.4% of our estimates. Although, OPEX-to-Sales remained stable versus last year, we note that higher utilities expenses could potentially cause some pain in the coming months. This rise in OPEX was partially offset however by a dip in other expenses, along with a 160bps lowering in the effective tax rate.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>