{"id":328613,"date":"2024-07-30T12:40:31","date_gmt":"2024-07-30T04:40:31","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328613"},"modified":"2024-07-30T12:40:33","modified_gmt":"2024-07-30T04:40:33","slug":"stock-in-focus-bdo-unibank-inc-bdo-30-july-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-30-july-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 30 July 2024 by AP 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>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>30 July 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 180.18<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Despite the upward trend in interest expense and non-perofming loans (NPLs), we note that BDO still offers the best return on capital employed (ROCE) when compared to its peers. Annualized ROCE this quarter improved to 15.8% after dropping to 14.3% last quarter, bucking our expectations that this particular ratio would soften to 14.9% this year from last year\u2019s 15.2%. <\/p>\n\n\n\n

Due to BDO\u2019s consistentdelivery of returns for investors, which is likely a direct result of its dominant position in the industry, we maintain a BUY on the stock with a Target Price of P180.18 per share.<\/p>\n\n\n\n

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

Earnings in line with forecast<\/h3>\n\n\n\n

The country\u2019s largest bank by assets reported a net income of P39.4-Billion for the first half, amounting to 49.1% of our full-year forecast of P80.3-Billion. Net interest income for the period reached P99.6-Billion, also within our expectations of P200.0-Billion for the whole year. Net interest income (NII) growth came in at +9.8%, its slowest since 2022, but this could be attributed to a high base effect. On a sequential basis, NII logged an increase of 3.4% following flat growth in the previous quarter.<\/p>\n\n\n\n

Lower provisioning, surge in NPL<\/h3>\n\n\n\n

We note that provisioning for the quarter dipped to P3.1-Billion from P3.4-Billion in the previous quarter and P3.6-Billion in the same period last year. However, in terms of asset quality, we saw a significant uptick in NPLs from 1.88% in 1Q 2024 to 2.06% in 2Q 2024. There was also a resulting drop in NPL cover, from 181% to 169%. Nonetheless, we expect BDO to still have better ratios than its peers as the rest of the industry chase loan volume and higher-yielding consumer loans to compensate for slower NIM expansion.<\/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>