{"id":326364,"date":"2024-01-16T17:50:56","date_gmt":"2024-01-16T09:50:56","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326364"},"modified":"2024-01-16T17:50:57","modified_gmt":"2024-01-16T09:50:57","slug":"stock-in-focus-bdo-unibank-inc-bdo-16-jan-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-16-jan-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 16 Jan 2024 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>16 Jan 2024<\/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 have a target price (TP) for BDO Unibank, Inc. at Php171.00 as we raised our forecasts to account for the higher interest rates in 2023. It is currently trading at the lower end of its Php126.00-Php130.00 range, which we believe is a chance to scoop up some shares given the bank\u2019s strong asset quality and high CASA ratio of 72%. At its last closing price, BDO offers a potential share price upside of 36% and a potential 2024 dividend yield of 2.4%.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\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 7.0% and 50% 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. This was despite our slower 2023 loan growth forecast, down by 1.0ppt to 8.0%. As a result, gross operating income inched 5.0% higher to Php259.4 billion. We also increased our 2023\/2024 provisions forecasts by 21% to Php13.9 billion\/Php11.5 billion due to the impact of inflation and higher rates.<\/p>\n\n\n\n

2024 prospects<\/h3>\n\n\n\n

We expect BDO\u2019s 2024\/2025 core net income to grow by 16.0%\/3.0% as we project its net interest income to grow by 12% and 9%, respectively. We expect to still see further net interest margin expansion albeit on a slower pace due to the expected cutting of rates in the latter half of the year; however, we highlight that loan growth will subsequently inch higher to double-digits when rates start to decline. We see a better loan outlook given the BSP\u2019s recent data on PH banks\u2019 loan growths in October, which improved to 7.1% from 6.6% in September.<\/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>