{"id":323556,"date":"2023-06-08T00:05:00","date_gmt":"2023-06-07T16:05:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323556"},"modified":"2023-06-07T23:44:59","modified_gmt":"2023-06-07T15:44:59","slug":"stock-in-focus-petron-corp-pcor-8-june-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-petron-corp-pcor-8-june-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Petron Corp. (PCOR) – 8 June 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PCOR<\/td><\/tr>
Company Name<\/strong><\/td>Petron Corp. <\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>8 June 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 3.72<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Given the consensus Target Price of P3.72, we recommend a BUY on PCOR at around P3.30 per share.<\/p>\n\n\n\n

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

Saudi Arabia to slash its oil output to shore up oil prices<\/strong><\/p>\n\n\n\n

The production cut will be implemented for a month beginning in July, with the possibility of further extensions beyond that. All in all, this would take OPEC+\u2019s total cuts to 4.66 Million bpd. While we do not expect oil prices to skyrocket to the same heights which we saw last year, due to the offsetting impact of slower growth in US and China, as well as the recession in Germany, prices could still rise to the USD80 level. The beginning of the peak summer driving season in the US, as well as Saudi\u2019s own need for an USD80\/barrel price in order to balance its budget help support this.<\/p>\n\n\n\n

More revenues and better margins for PCOR<\/strong><\/p>\n\n\n\n

For PCOR, the potential increase in price is likely to lead to higher topline figures, though we note that we may also see sequential improvement in the gross margin level. When looking at crack spreads for RBOB (the difference between crude oil prices and selling prices), average levels for 2Q 2023 have shown a 16.5% increase relative to 1Q 2023 levels. YTD, the spread has also surged by 49.8%, despite concerns of slower demand amidst growth concerns.<\/p>\n\n\n\n

Additionally, stabilizing interest rates and easing worries of another fed hike should temper the company\u2019s financing costs. 58.9% of PCOR\u2019s debt is short-term, and as such interest expense may start to trend downwards as the debt profile starts to shift more towards lower cost issuances.<\/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>