{"id":326383,"date":"2024-01-16T18:24:29","date_gmt":"2024-01-16T10:24:29","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326383"},"modified":"2024-01-16T18:24:40","modified_gmt":"2024-01-16T10:24:40","slug":"stock-in-focus-san-miguel-food-beverage-inc-fb-16-jan-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-san-miguel-food-beverage-inc-fb-16-jan-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: San Miguel Food & Beverage, Inc. (FB) – 16 Jan 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>FB<\/td><\/tr>
Company Name<\/strong><\/td>San Miguel Food & Beverage 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 53.20<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We retain our Php53.20 target price (TP) for San Miguel Food & Beverage (FB) based on our rolled-over Discounted Cash Flow (DCF) valuation and upgrade to a BUY recommendation. <\/p>\n\n\n\n

We believe that although the food division is currently dragging FB\u2019s profits on cost pressures, we are bullish on the recovery of FB from FY24 onwards on (1) strong brand equity and new brand campaigns driving volume growth in the beer and spirits division, (2) recovery of volume sales in the foods division, and (3) tapering prices of commodities. FB is also currently trading at a PE of 11.2x, which is lower than its 5-year historical PE of 22.9x and lower than the average PE of its closest peers at 19.6x. Our Target Price offers a share price upside of 5.9% and a total return potential of 10.9%, inclusive of our 2024 dividend yield of 5.4%.<\/p>\n\n\n\n

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

2024 outlook<\/h3>\n\n\n\n

We expect FB to recover from its 2023 slump on improving macro environmental factors. Easing inflation coupled with more favourable factors (i.e. moderating raw material prices, lowering logistics costs) may sustain volume demand in its beer and spirits businesses, as well as improve demand and margins in its foods unit. We project that the beer and spirits segments may drive bottomline growth for the year.<\/p>\n\n\n\n

Forecast adjustments<\/h3>\n\n\n\n

We cut our 2023 net income estimate by 11% to Php20.8 billion on account of FB\u2019s weak performance for 9-momth (9M) 2023 and kept our 2024 forecast at Php26.3 billion on an expectation of recovery. <\/p>\n\n\n\n

We kept our topline estimates of Php387.1 billion\/ Php419.1 billion for 2023\/ 2024 while we slightly adjusted our gross profit estimates by -3%\/ +2% to Php94.5 billion\/ Php109.5 billion on a 89bps\/ +53bps margin differences to 24.4%\/ 26.1%. We also cut our operating income estimates by 13%\/ 4% to Php42.5 billion\/ Php54.6 billion on a 1.80ppts\/ 51bps margin decline to 11.7%\/ 13.7% on account of higher operating expenses.<\/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>