INVESTORS have become optimistic about Jollibee Foods Corp. (JFC) after its top official told shareholders about the company’s strong business rebound as its operating income last year neared pre-pandemic levels.
Data from the Philippine Stock Exchange showed a total of 2.84 million shares worth P573.63 million were traded from June 27 to July 1, making it the 15th most actively traded stock last week.
Shares in Tony Tan Caktiong’s company grew by 2.5% week on week to P205 per share on Friday. Year to date, the stock has declined by 4.7%.
In a Viber message, Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said that the growth was mainly driven by the company’s “strong” first-quarter income report.
Timson Securities, Inc. Head of Online Trading Marc Kebinson L. Lood anchored the stock company’s upward trend to the investors’ and market players’ optimism.
During JFC’s annual stockholders’ meeting on June 24, President and Chief Executive Officer Ernesto Tanmantiong noted that the business turned around last year, calling it the company’s “defining achievement for 2021 — to have generated an operating income at par with pre-pandemic levels even as system-wide sales were behind by 13.2%.”
Mr. Lood said in a text message: “Investors are somewhat cheerful about this news, particularly in the long term, because JFC is focusing more on international expansion, which has more room for exponential growth, and the strong rebound in operating income shows no sign of slowing the company’s goal of becoming one of the top five restaurant chains in the world.”
Last year, operating income amounted to P6.32 billion, nearly equal the P6.48 billion recorded in 2019.
In the first quarter of this year, JFC’s attributable net income surged more than tenfold to P2.31 billion in the first quarter last year from P152.65 million in the same period last year.
As mobility restrictions continue to ease while prices of basic commodities maintained their rise, Mr. Arce expects JFC’s second-quarter net income to reach P1.6-billion net income. He sees full-year 2022 and 2023 profits to hit P6.4 billion and P8.6 billion, respectively.
Mr. Lood expects JFC’s net income to reach P7.5 billion by yearend, as the store expansion continues.
For Mr. Arce, market players should monitor the country’s inflation rate as it can affect the company’s input prices, among others.
“For the immediate future, investors and businesses will be constantly monitoring inflation levels as accelerating inflation can raise input prices, [and] reduce consumer purchasing power unless incomes rise. Likewise, the monetary policies employed to contain inflation can damage growth and employment,” he said.
“Rising prices of basic commodities will certainly affect JFC in terms of rising cost of raw materials, rising transport costs and quite possibly supply chain snarls. This would ultimately bite into the company’s bottom line,” Mr. Arce added.
Mr. Lood expressed optimism as the company’s “rapid expansion may offset the costs and generate significant revenue in the future.”
“Immediate support is estimated to range between P200.00 and P198.80. If broken, the stock could retreat to P192.00. Immediate resistance, on the other hand, may be placed between P205.40 to P206. If breached, the next level seen is at P210,” Mr. Arce said.
Mr. Lood pegged the support at P192, while placing JFC’s resistance at P222. — Mariedel Irish U. Catilogo
