{"id":327812,"date":"2024-05-08T16:49:53","date_gmt":"2024-05-08T08:49:53","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327812"},"modified":"2024-05-08T16:49:55","modified_gmt":"2024-05-08T08:49:55","slug":"stock-in-focus-bdo-unibank-inc-bdo-8-may-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-8-may-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 8 May 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>8 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 180.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We raised our target price (TP) for BDO Unibank, Inc. (BDO) by 3% to Php180.00 as we rolled forward our estimates and slightly raised our loan growth expectations to 10.5%. We believe BDO can ride on the momentum of the strong loan growth it showed in the 1st quarter (1Q) 2024 with the continued recovery in corporate and consumer loans.<\/p>\n\n\n\n

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

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

BDO reported a 1Q 2024 net income of Php18.5 billion, 12% higher year-on-year (y\/y), in-line with RSEC and consensus estimates. Net interest income increased 13% y\/y as gross customer loans grew 13%. Non-interest income climbed 11% from stable growth of fee-based and treasury\/FX businesses. Asset quality remained formidable with NPL ratio at 1.88% and NPL coverage at 181%. ROE was 14.3%.<\/p>\n\n\n\n

Robust loan growth<\/h3>\n\n\n\n

The bank\u2019s loan growth of 13% in 1Q 2024 beat the industry loan growth of 9.3%. This was led by the 16.6% jump in corporate loans, along with the improvement in capital expenditures, followed by the sustained growth in consumer loans at 13.5%. The middle market segment remained around the mid-single digit levels at 6.7%. In line with BDO\u2019s strong loan growth, we slightly raised our loan growth assumptions for 2024\/2025 to 10.5% from 10%.<\/p>\n\n\n\n

NIMs to stay flattish in 2024<\/h3>\n\n\n\n

Net interest margin (NIM) was 6bps higher y\/y but 7bps lower q\/q to 4.63%. Management attributed this to the refinancing of the peso bond, which caused a slight uptick in their cost of funds. Nevertheless, management expects NIMs will be flattish throughout the year despite the expected rate cuts as loan growth will back this up.<\/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>