{"id":325539,"date":"2023-11-02T13:02:40","date_gmt":"2023-11-02T05:02:40","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325539"},"modified":"2023-11-02T13:02:42","modified_gmt":"2023-11-02T05:02:42","slug":"stock-in-focus-puregold-price-club-pgold-3-nov-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-puregold-price-club-pgold-3-nov-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Puregold Price Club (PGOLD) – 3 Nov 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>3 Nov 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 56.35<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Given its steady expansionary moves alongside its consumer-friendly pricing, we expect the retailer to gain greater market share and market power in the medium to long term. Seeing as results were solid despite the challenging macro environment, we recommend a BUY on PGOLD.<\/p>\n\n\n\n

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

Consolidated net income rose 2.1% year on year<\/h3>\n\n\n\n

PGOLD’s consolidated net income in the first nine months (9M) rose by 2.1% year on year to P6.6 Billion. The 9M 2023 earnings are in-line with our expectations, accounting for 67% of our full year projections. We note that the first 9 months of the year typically contribute around 67% of PGOLD’s full-year earnings. <\/p>\n\n\n\n

PGOLD grew consolidated revenue to P139.3-Billion in the first nine months of 2023 which represents a 9.2% growth from P127.6-Billion in the same period last year. The 9M 2023 revenue which is 72% of our projected revenue for the year is in line with the pre-pandemic average and our forecast. In the first nine months, the enterprise experienced positive same store sales growth (SSSG) of +4.8% from Puregold Stores and +4.1% from S&R Warehouse clubs driven primarily by higher traffic.<\/p>\n\n\n\n

Expenses tick up due to inflation<\/h3>\n\n\n\n

COGS-to-Sales and OPEX-to-Sales for 9M23 tick up by 50bps and 30bps respectively versus last year. We attribute this primarily to inflationary impact, while noting that gross margins would naturally be challenged due to PGOLD\u2019s emphasis on affordability and market share. <\/p>\n\n\n\n

With that being said though, we observed that Q3 margins actually improved on a sequential basis despite renewed price pressures. Both gross and operating margins saw their numbers tick upwards by 30bps and 40bps QoQ. On the latter, we can chalk this up to continued focus on in-store cost management, as OPEX-to-Sales noticeably dropped by 190bps compared to Q2.<\/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>