{"id":326593,"date":"2024-02-02T00:33:28","date_gmt":"2024-02-01T16:33:28","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326593"},"modified":"2024-02-02T00:33:29","modified_gmt":"2024-02-01T16:33:29","slug":"stock-in-focus-rfm-corp-rfm-2-feb-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-rfm-corp-rfm-2-feb-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: RFM Corp. (RFM) – 2 Feb 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>RFM<\/td><\/tr>
Company Name<\/strong><\/td>RFM Corp.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>2 Feb 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 3.54<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We believe that RFM is undervalued given its earnings. We are recommending a BUY on RFM with a Target Price of P3.54\/share, an upside of +22.24% from its last traded price.<\/p>\n\n\n\n

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

Earnings recap<\/h3>\n\n\n\n

In the 3rd quarter (3Q) 2023, RFM\u2019s sales expanded +7.79% year-on-year (y\/y) to P5.33 billion as the company recorded stronger growth due to price increases implemented earlier in the year. Net income climbed to P423 million, an increase of +64.59% y\/y as margins improved.<\/p>\n\n\n\n

Resilient operating segments<\/h3>\n\n\n\n

RFM posted single-digit growth across its operating segments. The consumer business grew by +9.65% y\/y to P3.96 billion in 3Q 2023. Institutional grew much slower at +2.81% to P1.35 billion in the same quarter. We forecast the consumer business to continue recording high growth in the high single to low teens growth for 2024E onwards.<\/p>\n\n\n\n

Price Hikes<\/h3>\n\n\n\n

RFM has been implementing price hikes since late 2022 and in early 2023. For the latter half of the year, the company has opted not to implement price hikes. The company has locked-in prices for key raw materials including wheat and milk up to June this year. This protects the company from any price shocks in key raw materials. Inflation has been slowing down in the country, within the target of the central bank\u2019s 2-4% range. <\/p>\n\n\n\n

In December 2023, the country recorded an inflation rate of 3.9%, marking the slowest reading since February 2022 and well within the BSP\u2019s target. As inflation starts to dwindle, interest rates should follow as analysts are betting on rate cuts starting by the 2nd half of the year. Margins as a result should see fewer shocks from price increases.<\/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>