{"id":326519,"date":"2024-01-25T13:05:00","date_gmt":"2024-01-25T05:05:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326519"},"modified":"2024-07-28T23:55:39","modified_gmt":"2024-07-28T15:55:39","slug":"free-stock-in-focus-emperador-inc-emi-25-jan-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/free-stock-in-focus-emperador-inc-emi-25-jan-2024-by-ap-securities\/","title":{"rendered":"FREE Stock in Focus: Emperador Inc. (EMI) – 25 Jan 2024 by AP Securities"},"content":{"rendered":"\n

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Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>EMI<\/td><\/tr>
Company Name<\/strong><\/td>Emperador Inc.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>25 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy on pullback<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 20.52<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We recommend investors to reduce their positions in EMI as we feel that the combination of its expensive valuations and the current Red Sea crisis present headwinds against the stock\u2019s price potential. We have a Sell recommendation on EMI with a Target Price of P20.52 per share.<\/p>\n\n\n\n

At its current forward Price-Earning (P\/E) ratio of 29.1x, EMI is trading at a whopping 160.6% premium to the index which we feel is greatly unwarranted given the likely cost challenges that the company is likely to be facing this year. Upon factoring in their respective EPS growth, EMI\u2019s Price-to-Earnings Growth (PEG) ratio stands at a steep 2.47x vis-a-vis the index\u2019s level of only 1.43x, further highlighting EMI’s expensive price tag. <\/p>\n\n\n\n

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

Rerouting of shipping to cause headaches<\/h3>\n\n\n\n

For at least the first half of the year, we feel that the recent rerouting of shipping companies away from the Suez Canal and towards the longer round-about in the Cape of Good Hope could significantly impact both EMI\u2019s logistical costs and raw
material expenditures. The Suez Canal serves as the only direct route for trade between Europe and Asia, and its removal from the equation has therefore led to a surge in shipping and container costs. World prices for 40ft containers are already
reflecting this as they are already up by a whopping 81.7% YoY. <\/p>\n\n\n\n

Negative impact on COGS<\/h3>\n\n\n\n

Given EMI\u2019s heavy exposure to suppliers in the European geographical area, it is highly likely that the rerouting of ships will be also be impacting the availability of the company\u2019s raw materials, thereby forcing it to order more inventory in order to offset the 2-week increase in the journeys of cargoes. This would however have the negative effect of inflating the company\u2019s cost of goods sold (COGS) and pressuring its margins downward.<\/p>\n\n\n\n

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NOTE: This is a Premium-exclusive stock report, originally for our Premium Access members, but we’re giving this to you free! To view other FREE stock reports<\/strong><\/a>, just click here. To get full access to all Premium-exclusive reports, upgrade to Premium Access<\/strong><\/a>\u00a0<\/span>today for as low as P399.00 a month!<\/em><\/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>