{"id":329877,"date":"2024-10-13T23:55:44","date_gmt":"2024-10-13T15:55:44","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=329877"},"modified":"2024-10-13T23:55:46","modified_gmt":"2024-10-13T15:55:46","slug":"stock-in-focus-robinsons-retail-holdings-inc-rrhi-14-oct-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-robinsons-retail-holdings-inc-rrhi-14-oct-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Robinsons Retail Holdings Inc. (RRHI) – 14 Oct 2024 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>RRHI<\/td><\/tr>
Company Name<\/strong><\/td>Robinsons Retail Holdings Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>14 Oct 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 43.30<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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The stock is operating on lower returns with higher financial risk. Despite this, RRHI is expected to grow by +16.33% year-on-year (y\/y) in 2025. Thus, we retain our BUY recommendation for RRHI with a target price of P43.30. <\/p>\n\n\n\n

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

Robinsons Retail Holdings, Inc. (RRHI)\u2019s three major segments\u2014Food, Drugstores, and Department Stores\u2014drove the company’s strong performance in the second quarter and first half of the year. Net sales increased +3.1% y\/y to P47.8 billion in the 2nd quarter (2Q) 2024, while gross profit increased +5.2% y\/y to 24.2%. <\/p>\n\n\n\n

Core earnings added +15.3% y\/y to P1.5 billion, while EBIT improved by +7.3% y\/y to P2.2 billion. Gross profit increased 4.4% y\/y to P22.5 billion in the 1st half (1H) of 2024, while net sales came in at P3.78 billion (+3.0% y\/y). Notably, a one-time gain from the merger of BPI and Robinsons Bank caused the parent company’s net profits to soar 3.8 times y\/y.<\/p>\n\n\n\n

RRHI expands into the premium retail sector with “Spatio” and increased capex in the Drugstore segment reflect its efforts to adapt and diversify, positioning the company for long-term growth.<\/p>\n\n\n\n

Lance Gokongwei has invested billions in stock buybacks for URC and RRHI to support their declining stock prices, but results have been disappointing, with RRHI hitting a decade-low of P35.39 in August. Despite still having P816mn left from its P8bn buyback budget, future buybacks are uncertain.<\/p>\n\n\n\n

However, RRHI reported strong net income growth in H1 2024, which may reassure investors after a -30% y\/y profit drop in FY23. The stock’s declining P\/E and P\/BV ratios indicate potential undervaluation, while RRHI declared a cash dividend of P2.00 per share, with a projected yield slowdown to 4.96% in 2024-2025.<\/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>