{"id":328920,"date":"2024-08-13T10:02:00","date_gmt":"2024-08-13T02:02:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=328920"},"modified":"2024-08-13T10:02:01","modified_gmt":"2024-08-13T02:02:01","slug":"stock-in-focus-sm-investments-corp-sm-13-aug-2024-by-first-metro-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-sm-investments-corp-sm-13-aug-2024-by-first-metro-securities\/","title":{"rendered":"Stock in Focus: SM Investments Corp. (SM) – 13 Aug 2024 by First Metro Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>SM<\/td><\/tr>
Company Name<\/strong><\/td>SM Investments Corp.<\/td><\/tr>
Broker<\/strong><\/td>First Metro Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>13 Aug 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 1,030.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are bullish on SM, which is among our top picks for the anticipated early-cycle rally next year. This view is supported by its large economic moat across cyclical sectors, as it owns the largest bank, real estate developer, and retailer in the Philippines. We reinstate coverage on SM Investments Corp. (SM) with a BUY rating and target price at PHP 1,030.00.<\/p>\n\n\n\n

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

Quality at a bargain<\/h3>\n\n\n\n

SM is trading at 12.6x 2025 Price-Earnings (P\/E) ratio, at -1 standard deviation from its historical mean, which is at a steep discount to its pre-COVID mean P\/E of 25.8x. Our TP\u2019s implied valuation is undemanding at 14.6x P\/E on 2025 earnings and is based on the average of P\/E (pegged at 15x 2025 EPS).<\/p>\n\n\n\n

Key risks<\/h3>\n\n\n\n

In the next 12 months, we believe that the risk for the counter is titled to the upside. This is due to (i) expectations of a cyclical upturn in economic data, especially in consumption, which is positive for retailing and mall rentals; (ii) scope for higher lending, financial transaction volumes, and stable asset quality; (iii) synergies with SM Smart City (Pasay reclamation); and (iv) return of foreign fund flows amid falling risk-free yields in developed markets and rising interest in the domestic growth theme.<\/p>\n\n\n\n

Still, key risks to the downside include demand cooling off in the face of higher inflation and the high interest environment, and structural challenges in the office and residential segments arising from exodus of POGOs and\/or greater adoption of hybrid work setup.<\/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>