{"id":326000,"date":"2023-12-06T21:59:41","date_gmt":"2023-12-06T13:59:41","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326000"},"modified":"2023-12-06T21:59:44","modified_gmt":"2023-12-06T13:59:44","slug":"stock-in-focus-bdo-unibank-inc-bdo-6-dec-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-6-dec-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 6 Dec 2023 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>BDO<\/td><\/tr>
Company Name<\/strong><\/td>BDO Unibank Inc.<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>6 Dec 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 171.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We upgraded our target price (TP) for BDO by 4% to Php171.00 as we raised our forecasts to account for the higher interest rates. BDO remains to have one of the best asset qualities in the industry with a 1.99% NPL ratio. Furthermore, the bank has the highest net interest margin among the top three banks as it is backed by a higher CASA ratio of 72%. At the current price, BDO offers a potential share price upside of 30% and a potential 2024 dividend yield of 2.3%.<\/p>\n\n\n\n

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

Net income climbs 35%<\/h3>\n\n\n\n

BDO\u2019s net income for 9-month (9M) 2023 reached Php53.9 billion, 35% higher year-on-year (y\/y), in line with Bloomberg consensus but above our own estimate. Net interest income (NII) increased by 27% y\/y to Php137.4 billion as customer loans and deposits grew by 7.5% y\/y to Php2.7 trillion and 12% y\/y to Php3.4 trillion, respectively, while non-interest income rose 8.8% y\/y to Php57.9 billion. Meanwhile, its non-performing loan (NPL) ratio was generally stable at 1.99% relative to the prior quarter\u2019s 1.95%, but note that it was better than the 2.23% recorded in the same period last year.<\/p>\n\n\n\n

Forecast updates<\/h3>\n\n\n\n

We raised our 2023\/2024 net income forecasts by 6% respectively to Php71.5 billion \/ Php83.0 billion accounting for the interest rate hikes and slower loan growth. We increased our net interest income forecasts by 7% and 5% respectively to Php178.5 billion and Php199.8 billion as we bumped up our interest rate assumptions from the BSP\u2019s off-cycle 25bps rate hike last October. <\/p>\n\n\n\n

This was despite lowering our FY23 loan growth forecast by 1.0ppt to 8.0%. As a result, gross operating income inched 5% higher to Php259.4 billion. We also adjusted our 2023\/2024 provisions forecasts upward by 21% to Php13.9 billion\/Php11.5 billion due to the impact of inflation and higher rates.<\/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>