{"id":324300,"date":"2023-08-04T00:20:34","date_gmt":"2023-08-03T16:20:34","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324300"},"modified":"2023-08-04T01:20:40","modified_gmt":"2023-08-03T17:20:40","slug":"stock-in-focus-bdo-unibank-inc-bdo-4-aug-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-4-aug-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 4 Aug 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>4 Aug 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

Strong earnings outpace expectations<\/strong><\/p>\n\n\n\n

BDO\u2019s earnings for the first half of the year exceeded APS and consensus forecasts, accounting for 51.5% and 51.1% of respective figures compared to a historical contribution of 47.0%. The beat was driven by higher than expected net interest income and reduced provisioning, even as interest expenses came in particularly strong. Of note is the fact that BDO\u2019s Q2 ROE of 15.7% is its highest ever.<\/p>\n\n\n\n

NIMs expand and loan growth remains within expectations<\/strong><\/p>\n\n\n\n

Net interest income for the quarter expanded by 30% to P46.1-Billion as the impact of steeper interest rate levels and continued repricing further broadened BDO\u2019s loan yields. Aside from the transmission of higher lending rates, the improvement in interest revenues was also supplemented by management\u2019s initiative to lock in higher rates in its investment securities. In terms of the loan book, growth continued to remain on par with management\u2019s guidance at 8%, with the bulk of this coming from consumer loans (+15%). <\/p>\n\n\n\n

Moving forward, the company has expressed its intent to continue strengthening the consumer segment\u2019s contribution to the total loan mix as most corporate borrowings remain skewed towards the working capital variety. Despite Q2 interest expenses being heavier than anticipated (36.7% of FY estimate), the strong performance in interest generation continued to outpace the climb in funding costs. Moving forward, we note that succeeding quarters may continue to see net interest margin (NIM) upside as funding competition slowly eases and loans maintain their repricing trajectory until 4Q 2023 or 1Q 2024.<\/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>