{"id":328683,"date":"2024-08-01T00:51:42","date_gmt":"2024-07-31T16:51:42","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328683"},"modified":"2024-08-27T00:31:43","modified_gmt":"2024-08-26T16:31:43","slug":"stock-in-focus-bdo-unibank-inc-bdo-1-aug-2024-by-first-metro-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-1-aug-2024-by-first-metro-securities\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 1 Aug 2024 by First Metro 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>First Metro Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>1 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 167.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We reiterate our BUY rating on BDO Unibank (BDO), raising the Target Price (TP) to PHP167.00. Since our last update, the stock has rallied by as much as 14.4%. We have shifted our valuation base to next year and raised our target price to capture the economy\u2019s cyclical upturn. Our TP is based on the Gordon growth model (8% long term growth, 13.8% ROE, 12.1% cost of equity) and implies 1.4x 2025 Book Value, equivalent to +1SD of the historical mean. Our forecasts are unchanged and we project BDO can deliver 13.8% ROE in 2024-2025 \u2013 higher than 2019\u2019s 12.6%.<\/p>\n\n\n\n

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

Positive outlook is intact<\/h3>\n\n\n\n

We continue to be bullish on the counter in view of the following ROE drivers: (i) scope for higher lending activity, (ii) robust volume-driven businesses, (iii) stable cost-to-income ratio at ~60% vs. pre-COVID levels (>63%), and (iv) higher dividend payout. We believe there is scope for earnings upside as the recovery materializes in the next 12-18 months.<\/p>\n\n\n\n

BDO is among our cyclical picks for 2025<\/h3>\n\n\n\n

We believe it is well positioned to leverage on our expected economic recovery and could potentially lead our anticipated early-cycle market rally \u2013 this is given BDO remains the country\u2019s biggest bank in terms of asset size. In addition, the counter is a constituent of the PSEi and MSCI indices and is thus poised to benefit from high trading liquidity and foreign visibility.<\/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>