{"id":327540,"date":"2024-04-17T21:57:47","date_gmt":"2024-04-17T13:57:47","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327540"},"modified":"2024-04-17T21:57:49","modified_gmt":"2024-04-17T13:57:49","slug":"stock-in-focus-jollibee-foods-corp-jfc-17-apr-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-jollibee-foods-corp-jfc-17-apr-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Jollibee Foods Corp. (JFC) – 17 Apr 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>JFC<\/td><\/tr>
Company Name<\/strong><\/td>Jollibee Foods Corp. <\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>17 Apr 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 314.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We retain our target price of (TP) of Php314.00 for JFC and maintain a BUY rating as the company achieves new topline records. We also believe that JFC\u2019s long-term growth potential is still attractive as it continues to expand its domestic and international business, improves its coffee and tea business, and invests in digital transformation to increase its operational efficiency. JFC is also trading cheaply at a Price-Earnings (P\/E) ratio of 25.9x, lower than its 5-year rolling average of 56.5x. At our TP, the potential share price upside is more compelling at 33.3%.<\/p>\n\n\n\n

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

2023 earnings grew 16% to Php8.8 billion<\/h3>\n\n\n\n

Jollibee Foods Corp. (JFC) reported 2023 attributable net income of Php8.8 billion, 16% higher year-on-year (y\/y), and in line with consensus but below our house estimates. System-wide sales (SWS) and revenues were at an all-time high, rising 16% and 15% to Php345.3 billion and Php244.1 billion, respectively, on the back of 10.6% same-store sales growth (SSSG) and 5.4% growth from new stores. Gross profits climbed 23% to Php45.3 billion on a 1.1ppts margin expansion to 18.6% owing to lower cost of goods. EBITDA was up 8% to Php33.8 billion on a 1.9ppts margin improvement. Operating income jumped 45% to Php14.4 billion on a 1.2ppts margin expansion to 5.9% on higher topline and lower expenses.<\/p>\n\n\n\n

PH remains a champion; international lines improve<\/h3>\n\n\n\n

The Philippines (PH) continues to drive SWS and revenues with 17.6% SWS growth
and 13.9% same-store sales growth (SSSG) on an 8.2% increase in transaction count and 5.2% growth in average check. Meanwhile, the international segment continues to improve, following a blended 14.4% SWS growth, although slightly behind in blended SSSG at 5.3% on weak CBTL SSSG at 1.7% and a drag in Superfoods (Highlands Coffee) with a 4.2% decline in SSSG. Nonetheless, other international businesses\/ regions remain healthy, resulting in a global SWS growth of 16.3% and SSSG of 10.6%.<\/p>\n\n\n\n

Bullish growth for the year<\/h3>\n\n\n\n

JFC expects its SWS to grow by 10%-14% with an SSSG of 5%-7% and a store
network increase of 7%-8%. Operating profit growth is projected to grow by 10%-
15%. JFC earmarks a capex of Php20-23.0 billion for the year to fund the expansion of 700-750 owned and franchised stores and other requirements.<\/p>\n\n\n\n

5-year strategy: expand in the global scene, advance in tech<\/h3>\n\n\n\n

JFC plans to expand in the global scene by maintaining market dominance in the PH, accelerating its international expansion in the rest of Asia and North America, scaling its franchise business in China, and building its Coffee & Tea business via Superfoods, Milksha and, CBTL brands. Moreover, it is increasing its investment in tech to advance its operations. The strategy will be funded within its Php20-23.0 billion capex budget for the year.<\/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>