{"id":325808,"date":"2023-11-23T13:39:40","date_gmt":"2023-11-23T05:39:40","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325808"},"modified":"2023-11-23T13:39:42","modified_gmt":"2023-11-23T05:39:42","slug":"stock-in-focus-jollibee-foods-corp-jfc-23-nov-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-jollibee-foods-corp-jfc-23-nov-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Jollibee Foods Corp. (JFC) – 23 Nov 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>JFC<\/td><\/tr>
Company Name<\/strong><\/td>Jollibee Foods Corp. <\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>23 Nov 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 277.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

At our current Target Price of P277.00\/share, upside for the stock is still significant at 16.4%.<\/p>\n\n\n\n

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

Strengthening outlook on the Peso<\/h3>\n\n\n\n

Since hitting its 2023 peak of P56.98 last Sept. 28, the USDPHP has weakened significantly, falling by 2.5% down to P55.54 as of November 20. Although short-
term volatility may still abound, we believe that there is room for the Peso to continue to gain ground relative to the greenback in the medium term.<\/p>\n\n\n\n

The key catalysts for this would be cooling inflation expectations and their subsequent impact on PH real interest rates, which may now start to outperform their US counterpart. While nominal rate movements by both the Fed and BSP used to be the previous indicators of future currency performance, real rates should now take greater prominence seeing as both central banks are expected to remain at a hold for the next few months. <\/p>\n\n\n\n

Based on consensus economists\u2019 forecasts gathered from Bloomberg, quarterly figures for both PH and US headline inflation are expected to continue easing. Given however that BSP RRP is coming from a higher base at 6.5% versus the 5.50% level of Fed rates, the decline in inflation expectations for both should leave the Peso with increasingly higher real rates in comparison to the Dollar. <\/p>\n\n\n\n

As such, we expect the spread between real rates for both currencies to rise steeply in favor of the Peso for this quarter and the next, coming from the deficits that we saw for most of the year. With this in mind, we think it is highly likely that Forex investors will be repositioning to go long on the Peso, in order to take advantage of the potentially higher real rates of return.<\/p>\n\n\n\n

Good news for importers<\/h3>\n\n\n\n

With a stronger currency comes cheaper imports, and as such we expect producers and consumers of imported products to be major beneficiaries as this would alleviate pressure on the COGS side and help support margins. In this regard, our pick would be JFC seeing as the currency impact on COGS could further add strength to the company\u2019s already solid earnings.<\/p>\n\n\n\n

While JFC\u2019s 9M 2023 results showed revenues and COGS laying at par with our expectations, operating income registered massive outperformance at P11.91-Billion which is already 97% of our full year forecast. This would\\ therefore warrant upward revisions on our part.<\/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>