{"id":325906,"date":"2023-12-02T23:26:27","date_gmt":"2023-12-02T15:26:27","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325906"},"modified":"2023-12-02T23:27:12","modified_gmt":"2023-12-02T15:27:12","slug":"stock-in-focus-universal-robina-corp-urc-2-dec-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-universal-robina-corp-urc-2-dec-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Universal Robina Corp. (URC) – 2 Dec 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>URC<\/td><\/tr>
Company Name<\/strong><\/td>Universal Robina Corp.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>2 Dec 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 145.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Despite a subpar 9-month (9M) 2023 performance, we retain our target price (TP) for URC of Php145.00\/share on strong hopes of a stellar 4th quarter (4Q) 2023 performance as holiday spending ramps up. URC is also trading cheaply at a PE of 19.6x, which is below its 5-year historical PE of 26.7x, albeit slighty higher than its closest peers median PE of 18.7x. \\<\/p>\n\n\n\n

With a share price potential upside of 23.9% and 2024 dividend yield of 3.2%, the potential total return of 27.1% is still attractive. We retain a BUY recommendation.<\/p>\n\n\n\n

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

Earnings grew 11% year-on-year (y\/y) <\/h3>\n\n\n\n

Universal Robina Corp. (URC) delivered an 11% growth year-on-year (y\/y) in 9M 2023, with core earnings at Php9.4 billion, falling below both estimates. Consolidated net sales grew 9% to Php117.6 billion, driven by the Agro-industrial & Commodities Group (AICG). <\/p>\n\n\n\n

The Branded Consumer Foods Group (BCFG) rose 3% to Php82.0 billion, while the AICG climbed 27% to Php35.6 billion. However, on a quarter-on-quarter basis, BCFG 3Q 2023 sales declined 4%. This was offset by a 38% growth in AICG, closing 3Q 2023 with a 6% growth to Php39.0 billion. EBITDA rose 15% to Php17.4 billion on a margin improvement of 46bps to 14.8% while operating income rose 17% to Php12.6 billion on a margin expansion of 73bps to 10.7% on cost-saving initiatives.<\/p>\n\n\n\n

Softer demand on BCFG<\/h3>\n\n\n\n

On a quarter-on-quarter (q\/q) basis, BCFG’s 3Q 2023 revenues fell 4% to on soft demand due to inflationary pressures. Topline of BCF Philippines was flattish as consumers continued to downtrade, the confectionary category being the most hit as sales volume decline in favour of lower-priced competitors. This is offset by growth in snacks and noodles. On the ther hand, BCF International fell 7% due to a high base and price adjustments.<\/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>