{"id":331176,"date":"2025-01-15T19:37:52","date_gmt":"2025-01-15T11:37:52","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=331176"},"modified":"2025-01-15T19:37:57","modified_gmt":"2025-01-15T11:37:57","slug":"stock-in-focus-universal-robina-corp-urc-15-jan-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-universal-robina-corp-urc-15-jan-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: Universal Robina Corp. (URC) – 15 Jan 2025 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>URC<\/td><\/tr>
Company Name<\/strong><\/td>Universal Robina Corp.<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>15 January 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 107.78<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

We have previously acknowledged that URC is substantially undervalued at current prices and rated the company a cautious BUY. However, the heightened risk of a serious volcanic event in Kanlaon, along with our expectation of persistently narrow margins due to declining sugar prices, leads us to rerate URC back to a HOLD despite the seemingly robust upside to consensus Target Price of P107.78.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

Ashes, ashes they all fall down<\/strong><\/p>\n\n\n\n

PHIVOLCS maintained Alert Level 3 over Kanlaon Volcano in Negros Occidental, with the possibility of being raised to Alert Level 4 should there be a surge in volcanic activity prompting hazardous and imminent eruptions. PHIVOLCS reported that the volcano spewed ash for around two hours on the 8th of January, emitting sulfur dioxide at a rate of 2,924 tons per day while also producing a plume that rose 500 meters above the crater which then drifted southwest. The agency also reported that 72 volcanic earthquakes have been recorded since Tuesday, and further warned of potential hazards such as sudden explosive eruptions, lava flow or effusion, ashfall, etc.<\/p>\n\n\n\n

Sugar to take a beating yet again<\/strong><\/p>\n\n\n\n

The Sugar Regulatory Administration (SRA) in late December expressed concern
over the impact of the Kanlaon eruption on the local sugar supply, especially since the area around the volcano is one of the main sugar production centers in the country. In response, the Department of Agriculture assured the public that it will import any shortfall in supply. URC, the country\u2019s top producer of refined sugar, operates four sugar mills on the island: Manjuyod, Santa Catalina, Kabankalan, and La Carlota. The La Carlota sugar mill, which URC acquired from ROX in 2020, is the closest to Kanlaon and lies less than 22 km west of the crater. <\/p>\n\n\n\n

Further, URC sources the sugarcane that it processes locally, meaning that the volcanic eruption\u2019s effect on sugarcane production dominoes to the supply for their sugar mills as well, particularly for those located within the volcano\u2019s vicinity. We believe that the mere proximity of the sugar mill puts it at a substantially higher risk of either a slowdown in production or a complete halt, making our concern all the more warranted.<\/p>\n\n\n\n

<\/div>\n\n\n\n

Check how many brokers recommend this stock<\/h2>\n\n\n\n
\n
All Stock Rankings<\/a><\/blockquote>