{"id":328847,"date":"2024-08-08T00:30:13","date_gmt":"2024-08-07T16:30:13","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328847"},"modified":"2024-08-08T01:00:02","modified_gmt":"2024-08-07T17:00:02","slug":"stock-in-focus-manila-electric-co-meralco-mer-8-aug-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-electric-co-meralco-mer-8-aug-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Manila Electric Co. – Meralco (MER) – 8 Aug 2024 by RCBC Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>MER<\/td><\/tr>
Company Name<\/strong><\/td>Manila Electric Co. (Meralco)<\/td><\/tr>
Broker<\/strong><\/td>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>22 March 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 427.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Meralco (MER) remains to be one of the most defensive stocks as its maturing distribution utility (DU) gets consistent energy sales. In addition, its diversification to the power generation business will be a key driver for a higher earnings growth in the future. For the second half of the year, we expect the power gen business to step as the DU business slows down after the peak hot season. Lastly, Meralco still offers a decent dividend yield of 5.2%. Hence, we reiterate our BUY rating on MER with a Target Price of P427.00.<\/p>\n\n\n\n

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

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

Meralco reported 1s half (1H) 2024 core net income of Php23.2 billion, 21% higher year-on-year (y\/y). Consolidated revenues inched 6% higher to Php237.5 billion on the back of an 8.7% jump y\/y in energy sales due to the hotter temperature.<\/p>\n\n\n\n

Meanwhile, total costs and expenses inched 3% higher to Php212.5 billion from the higher purchased power cost and the maintenance of the DU facilities. Equity in net earnings of associates and joint ventures logged a 25% y\/y decline to Php5.0 billion due to the scheduled outages of several of its plants and from PacificLight\u2019s lower margins.<\/p>\n\n\n\n

Update on Terra Solar<\/h3>\n\n\n\n

As of the 2nd week of July, the 3,500MW Terra Solar farm is 54% complete. Phase one is expected to be completed by 2026, while phase 2 is slated for operations by 2027. Terra Solar\u2019s chairman, Manny Pangilinan says that the process for a foreign joint venture partner for Terra Solar is in the works as the final bids will be submitted by August 15.<\/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>