{"id":332049,"date":"2025-03-28T01:01:09","date_gmt":"2025-03-27T17:01:09","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=332049"},"modified":"2025-03-28T01:01:14","modified_gmt":"2025-03-27T17:01:14","slug":"stock-in-focus-universal-robina-corp-urc-28-march-2025-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-universal-robina-corp-urc-28-march-2025-by-ap-securities\/","title":{"rendered":"Stock in Focus: Universal Robina Corp. (URC) – 28 March 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>28 March 2025<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 87.56<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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URC\u2019s BCF strategy will remain focused on increasing and sustaining volume growth, as well as recovering market share. For the commodities division, the company will focus on profit recovery and sustainable cash generation. Although current trends of lowering commodity prices will remain a risk for its commodity business, URC sees signs of Philippine consumer turnaround, which is in line with our expectations of improving consumer spending and sentiment underpinned by benign inflation, cumulative wage hikes and election- driven spending. As such, we maintain a CAUTIOUS BUY rating on URC with a Target Price of 87.56\/share.<\/p>\n\n\n\n

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

Earnings ahead of consensus estimate<\/strong><\/p>\n\n\n\n

URC’s 2024 earnings beat consensus estimates by 8.7% attributed to growth of value-for-money segments and higher volumes for both BCF and AIC segments. However, URC earnings on a year-on-year (YoY) basis went down by 2% from last year. Additionally, operating income ended lower by 4% YoY to P16.7-Billion, which was caused by lower profits from the sugar and renewables (SURE) business. On a positive note, SURE returned to profitability in 4Q24 after high-cost inventories have been flushed out. <\/p>\n\n\n\n

BCF International\u2019s volume and value driven growth<\/strong><\/p>\n\n\n\n

BCF International revenues grew 8% YoY to P34.8-Billion from P32.2-Billion in the previous year despite tepid consumer sentiment in the international market. <\/p>\n\n\n\n

All business units continued to deliver solid volume and value growth, which saw accelerated market share gains against key competitors backed by higher advertising and promotion as a key growth strategy. Its operating income also grew significantly as EBIT margins expanded by 332bps.<\/p>\n\n\n\n

SURE drags 2024 earnings but turns around losses<\/strong><\/p>\n\n\n\n

As expected, SURE\u2019s EBIT margin declined by 1,314 bps for the year, which dragged URC\u2019s net income growth. On the bright side, SURE\u2019s 4Q24 milling season was off to a great start and has since turned around its losses after the high carrying costs of inventories declined. Luckily enough, its La Carlota Plant remained unaffected despite numerous scares of the Kanlaon Volcano\u2019s sporadic eruptions and it was even deemed as URC\u2019s top producing milling plant, contributing to SURE\u2019s success.<\/p>\n\n\n\n

Moving forward, URC expects more stable margins of around 10-20% in 2025, coming from elevated margins in late 2023 and 2024. Furthermore, the margins will remain protected by supply lock-ins for 1H24 and the company is already in negotiations for the rest of the balance.<\/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>