Citi sees SM Investments stock narrowing NAV discount with retail-led growth

EditorEmilio Ghigini
Published 13/01/2025, 09:24
Citi sees SM Investments stock narrowing NAV discount with retail-led growth
SM
-

On Monday, Citi analysts began coverage of SM Investments Corp. (SM:PM) (OTC: SVTMF), assigning a Buy rating to the company's stock along with a price target of PHP1,091.00. SM Investments is recognized as one of the largest conglomerates in the Philippines and holds the title of the largest stock by market capitalization in the country's stock market.

Citi's analysis suggests that SM Investments is a central player in the Philippine economy, with over 90% of its asset value stemming from its Retail, Property, and Banking businesses, sectors in which it maintains a leading position. The firm's optimistic outlook is further bolstered by the expectation that the Philippines' GDP will grow by 6% in 2025, which is projected to be the highest among the ASEAN countries.

The analysts expect that SM Investments' retail business will significantly contribute to the company's earnings in 2025, with a forecasted year-over-year growth of 19%, following a challenging year in 2024. The anticipated growth in the retail sector is set to play a crucial role in the company's performance.

Furthermore, Citi predicts that an increased contribution from SM Retail, which is currently an unlisted subsidiary, will help reduce the net asset value (NAV) discount from the present 30% to 15%, aligning it with historical averages. The price target of PHP1,091.00 is based on a net asset value (NAV) method, which allocates 36% to SM Retail, 32% to SM Prime Holdings (SMPH), and 28% to BDO Unibank (BDO), reflecting the conglomerate's diversified investment portfolio.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers
© 2007-2025 - Fusion Media Limited. All Rights Reserved.