{"id":324029,"date":"2023-07-13T00:47:46","date_gmt":"2023-07-12T16:47:46","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324029"},"modified":"2023-07-13T00:47:46","modified_gmt":"2023-07-12T16:47:46","slug":"stock-in-focus-bdo-unibank-inc-bdo-13-july-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-13-july-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 13 July 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>BDO<\/td><\/tr>
Company Name<\/strong><\/td>BDO Unibank Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>13 July 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 169.70<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We are revising our Target Price upwards by 27.6% from P133.00 to P169.70, as we factor in 2024 forecasts. Simultaneously, we continue to recommend a BUY on the stock as we note that at current price levels, upside remains attractive. Likewise, earnings prospects for the next few quarters are expected to maintain a rosy trajectory.<\/p>\n\n\n\n

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

Repricing momentum alongside resilient CASA<\/strong><\/p>\n\n\n\n

As BSP rates are kept at 6.25% throughout the rest of the year, we expect the impact of higher loan repricing to continue to be felt throughout the year. While the sustained elevation in rates would also place added pressure on deposit costs, BDO\u2019s robust CASA base relative to other banks should help insulate it against significant deposit cost headwinds. Heading into next year, gradual rate cuts should eventually lead to some cool down in net interest income expansion, though nevertheless, NIMs are still likely to remain elevated compared to pre-pandemic norms.<\/p>\n\n\n\n

Branch expansion remains productive<\/strong><\/p>\n\n\n\n

While concerns have been raised about the strategy\u2019s cost efficiency, we see BDO\u2019s continued branch expansion as a positive in terms of both profitability and loan growth.<\/p>\n\n\n\n

Some risks in asset quality and loan growth<\/strong><\/p>\n\n\n\n

Stout NIMs aside, the higher cost of financing may lead to some downside risk in terms of loan growth for 2023. Additionally, some deterioration in the NPL ratio is also a possibility. Barring any unforeseen circumstances however, provisioning levels should be more than adequate in covering for any upticks in NPLs.<\/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>