{"id":325730,"date":"2023-11-15T22:39:34","date_gmt":"2023-11-15T14:39:34","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325730"},"modified":"2023-11-15T22:39:36","modified_gmt":"2023-11-15T14:39:36","slug":"stock-in-focus-ayala-corp-ac-15-nov-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-ayala-corp-ac-15-nov-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Ayala Corp. (AC) – 15 Nov 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>AC<\/td><\/tr>
Company Name<\/strong><\/td>Ayala Corporation<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>15 Nov 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 877.40<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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AC has embarked on a much-touted rationalization of its portfolio, which involved the selling of non-core assets and the reinvestment of the proceeds into its core units and emerging businesses in health and logistics. While the company has yet to individually report on the earnings of these emerging businesses on a quarterly basis, we note that the losses under \u201cAutomotive & others\u201d has narrowed during the first nine months. We are optimistic that these units will soon make positive contributions in the same way that powergen has grown to be a core business unit in the span of only a few years. <\/p>\n\n\n\n

Considering the earnings beat and our long-term view on AC, we maintain our BUY rating on the company based on consensus Target Price of P877.40.<\/p>\n\n\n\n

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

AC core businesses deliver earnings beat<\/h3>\n\n\n\n

AC\u2019s reported core net income of P13.9-Billion came in ahead of consensus forecast of P8.7-Billion for the period, while year-to-date (YTD) earnings of P32.3-Billion accounted for 82.5% of full-year estimates. Most of the conglomerate\u2019s core business units, except for telco, grew their contribution to the bottom line. Both the banking and property units delivered double-digit growth, while power generation nearly doubled its income as more renewable energy projects come online.<\/p>\n\n\n\n

Property on the rise, banking is starting to normalize<\/h3>\n\n\n\n

Ayala Land\u2019s net income surged 38% year-on-year (YoY) to P48.6-Billion on the back of a 40% jump in mall revenues while residential sales (+4%) and office sales (+31%) remained resilient despite headwinds. Hotels & resorts further padded the bottom line with 62% growth in revenues. <\/p>\n\n\n\n

BPI, on the other hand, still delivered 26% net income growth but we observed that the bank\u2019s Net Interest Margin (NIM) has narrowed slightly from 4.11% in Q2 to 4.07% in Q3. Nonetheless, the bank should continue to deliver robust earnings as interest rates remain higher for longer.<\/p>\n\n\n\n

Powergen taking a bigger slice, but the quarter takes a seasonality hit<\/h3>\n\n\n\n

ACEN\u2019s 9-month (9M) 2023 net income was padded by gains on asset sales and
revaluation, and revenues for the quarter was tempered by seasonally weaker wind and solar generation. Despite this, we cannot discount ACEN\u2019s growing contribution to AC and it is fast becoming part of AC\u2019s core portfolio. We expect this contribution to grow further as more new projects come online from now until the first half of 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>