{"id":326300,"date":"2024-01-05T12:47:32","date_gmt":"2024-01-05T04:47:32","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326300"},"modified":"2024-01-05T12:47:35","modified_gmt":"2024-01-05T04:47:35","slug":"stock-in-focus-dl-industries-inc-dnl-5-jan-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-dl-industries-inc-dnl-5-jan-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: D&L Industries Inc. (DNL) – 5 Jan 2024 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>DNL<\/td><\/tr>
Company Name<\/strong><\/td>D&L Industries Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 8.09<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Stock deserves a BUY. Given the company\u2019s appealing valuations as well as the appealing macroeconomic story, we assign a BUY rating on the stock.<\/p>\n\n\n\n

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

Turnaround story with attractive valuations<\/h3>\n\n\n\n

Out of the many consumer names, one of the most undervalued would be the listed manufacturer DNL. The stock was mainly avoided like a disease during 2023 due to disappointing sales volumes and earnings. This year however, we believe that the stock\u2019s fortunes are primed for a reversal. Amongst the roster of F&B manufacturers in the local bourse, DNL possesses the strongest revenue and EPS growth prospects for 2024 at 22.4% and 36.1% respectively. This underpins the company\u2019s attractive price tag which is highlighted by its extremely low PEG ratio. At 0.36x, DNL\u2019s PEG ratio presents a whopping 73.1% discount relative to the industry mean, thereby underscoring the stock\u2019s strong growth prospects for this year.<\/p>\n\n\n\n

Demand for food is a catalyst for DNL<\/h3>\n\n\n\n

According to the most recent consumer expectations survey, most buyers were expecting to allocate the bulk of their budgets towards food purchases. The survey results in particular showed a stronger-than-usual demand for food products, with the index reading coming in at 66.5, the highest level in the last 8 quarters. In our view, DNL is well-positioned to capitalize on this given that the lion\u2019s share of the company\u2019s revenues comes from the manufacturing of food ingredient-related products. <\/p>\n\n\n\n

With inflation expected to finally recede to manageable levels by this year, the increase in consumers\u2019 real purchasing power should further stimulate their appetites for food expenditures. This could in turn give DNL\u2019s sales volumes a much-needed boost, especially for its higher-margin specialty food ingredient products. Given that the prices of its key inputs palm oil and coconut oil have now more or less normalized, this may very well also lead to margin expansion for the company.<\/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>