{"id":324765,"date":"2023-09-06T16:16:29","date_gmt":"2023-09-06T08:16:29","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=324765"},"modified":"2023-09-06T16:16:31","modified_gmt":"2023-09-06T08:16:31","slug":"stock-in-focus-pldt-inc-tel-6-sept-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-pldt-inc-tel-6-sept-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: PLDT Inc. (TEL) – 6 Sept 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>TEL<\/td><\/tr>
Company Name<\/strong><\/td>PLDT Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>6 Sept 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 1,678.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We upgrade our rating from HOLD to BUY. We previously gave TEL a HOLD rating following its 1st half (1H) 2023 earnings results, citing the lack of growth catalysts and increasing competition in the sector, as well as concerns about TEL\u2019s leverage as its net debt-to-EBITDA remains high at 2.48x. However, we believe that these negative factors have been mostly priced in and that the sell-off since then has been overdone. Given this, we are now recommending a BUY on TEL, although we note that the consensus target price of P1,730.00 is a bit too high and our estimate of P1,678.00 per share would be more realistic.<\/p>\n\n\n\n

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

Stocks typically drop on ex-date, but this is uncalled for<\/strong><\/p>\n\n\n\n

PLDT, Inc. (TEL) has lost 12.5% of its market cap since the cash dividend ex-date on August 14. The stock logged its biggest loss on the last trading day of August, and shed 4.4% in one trading day on the back of heavy foreign selling. TEL is now trading only P20.00 above its 52-week low of P1,130.00.<\/p>\n\n\n\n

TEL at its cheapest relative valuation to GLO<\/strong><\/p>\n\n\n\n

TEL\u2019s close of P1,150.00 prices the company at 7.8x 12-month blended forward (12BF) P\/E, which is 40.5% lower than its 10-year average 12BF P\/E ratio of 13.1x. More notably, this is only 59.1% of the 12BF P\/E ratio of its rival telco Globe Telecom (GLO). This is the lowest ratio between the two telcos\u2019 P\/E ratios for the past 10 years. For reference, TEL\u2019s P\/E is typically 86.2% of GLO\u2019s, and a return to this average would imply that TEL should be trading at around P1,678.00 per share. TEL\u2019s current EV-to-EBITDA of 5.2 is also close to its lowest relative valuation against GLO\u2019s 6.8, as the two companies typically trade at around the same EV\/EBITDA.<\/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>