{"id":330584,"date":"2024-11-25T16:02:50","date_gmt":"2024-11-25T08:02:50","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=330584"},"modified":"2024-11-25T16:01:48","modified_gmt":"2024-11-25T08:01:48","slug":"stock-in-focus-manila-electric-co-meralco-mer-25-nov-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-manila-electric-co-meralco-mer-25-nov-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Manila Electric Co. – Meralco (MER) – 25 Nov 2024 by AP 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>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>25 Nov 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 479.20<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We are confident that if anyone can afford to spend 60% more than its full-year net income on capex, MER is on the top of the list. However, the fact remains that MER is still expensive relative to our fair value estimate so we maintain our HOLD rating (Target Price: P479.20) despite our positive outlook on the company.<\/p>\n\n\n\n

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

MER hikes capex for storm-proofing<\/strong><\/p>\n\n\n\n

MER confirmed statements made by its COO to the press that the company is hiking its 2025 capex budget from this year\u2019s P40.0-Billion as it plans to spend P25.0-Billion for storm-proofing its distribution system. As of September 2024, MER has spent a total of P26.0-Billion, P16.7-Billion of which was on improvements made to its distribution system. If MER maintains this current pace, we expect capex spend on the DU side of the business to reach around P20-22-Billion by year-end.<\/p>\n\n\n\n

Powering up<\/strong><\/p>\n\n\n\n

On top of this, the company expects significant capex spend as it gets its mammoth Terra Solar project off the ground in time for the target completion of Phase 1 by 2026. There will also be additional capex allocated for the San Miguel Global Power (SMGP) natgas power plant that MER is co-developing with AP and SMC. The company declined to provide specific numbers for the Terra Solar and SMGP capex as it is still subject to Board approval, but we estimate that spending on these two projects alone could be between P35-40-Billion next year.<\/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>