By Abigail Marie P. Yraola, Researcher
PLDT, Inc. shares dipped as investors rotated their funds by shifting to other sectors poised to grow as movement restrictions gradually eased.
Data from the Philippine Stock Exchange (PSE) showed a total of 666,815 PLDT shares worth P1.2 billion exchanged hands from Feb. 14 to 18, making it the 11th most actively traded in the stock market last week.
PLDT finished at P1,782 apiece on Friday, down by 2.6% week on week. Year to date, the stock’s price fell by 1.7%.
Regina Capital Development Corp. Equity Analyst Anna Corenne M. Agravio said PLDT was volatile than usual last week, attributing it to “investor’s rotation,” as the number of coronavirus disease 2019 (COVID-19) cases decline and the government lowering the alert level systems in the country.
“Investors rotated their funds out of pandemic-defensive stocks, such as PLDT, and into stocks considered as ‘reopening plays,’” she said.
For PNB Securities, Inc. President Manuel Antonio G. Lisbona, the stock’s price action implies that the market is expecting PLDT to generally underperform the market for the next six to 12 months.
“This is in line with our estimated valuation… implies a 10.2% downside from the current price, which of course, can be tempered or reversed if PLDT’s full-year 2021 results surprise to the upside,” Mr. Lisbona said.
As of Feb. 18, the country posted 2,232 new coronavirus infections, the 10th consecutive day additional infections fell below 5,000, bringing the total cases since the pandemic started to 3.6 million. Active cases stood at 65,796.
Metro Manila and nearby areas will remain under Alert Level 2 until the end of the month as new infections remain low.
Under Alert Level 2, more business establishments are allowed to operate at higher capacities of up to 70%.
Last Monday, the corporate business unit of the PLDT group, PLDT Enterprise, announced its partnership with Multisys Technologies Corp., a software solutions company, to provide e-commerce solution Multistore for small enterprises.
Multistore is designed to help businesses build their brand and increase sales through digital by creating an online presence for their products and services “in a short amount of time and at a much lower cost.”
Ms. Agravio said the partnership is generally a net positive for PLDT. However, it did not make an impact on the company’s share price.
“The e-commerce solution allows PLDT to tap into an attractive growth pocket that has promising returns in the future. Therefore, it has the potential to grow into something bigger, which could benefit PLDT in the longer scheme of things,” she said.
In the nine months to September last year, PLDT’s revenues rose by 8% year on year to P143.86 billion. Its attributable net income during the period reached P18.85 billion, lower by 4.3%.
Ms. Agravio expects PLDT to report an attributable net income of around P25 billion for 2021 and close to P27 billion this year.
“It is highly likely that PLDT was able to sustain its top-line growth in Q421 (fourth quarter 2021), but net income could go both ways depending on the company’s expenses during the period,” she said.
For Mr. Lisbona, PLDT remains to be a core recommendation given its history of consistent dividend payments.
“At the current price of P1,782, the gross dividend yield is 4.60%. Investors should slowly accumulate especially on days where the price dips.”
He placed the telecommunications company’s immediate support at P1,750 and immediate resistance at P1,850.
For Ms. Agravio, support is at P1,760 while resistance is at P1,860.
Hastings Holdings, Inc., a unit of PLDT Beneficial Trust Fund subsidiary MediaQuest Holdings, Inc., has a majority stake in BusinessWorld through the Philippine Star Group, which it controls.
