Profit taking drags Ayala Corp. stock price lower

AYALA CORP.’S stock price fell last week after investors took profits amid developments in the conglomerate’s subsidiaries.

Ayala Corp. was the seventh most actively traded stock last week, with a total of 1.89 million shares worth P1.23 billion having exchanged hands from March 18 to 22, according to data from the Philippine Stock Exchange (PSE).

Its shares closed at P632 apiece on Friday, down 4.7% week on week. Since the start of the year, the stock has fallen 7.2%.

“Ayala Corp. has been on a waterfall move, mainly dragged by Ayala Land, Inc. (ALI)’s correction. Corporate news that might have added up to the conglomerate’s price action this week was Bank of the Philippine Island (BPI)’s divestments of its shares in GoTyme Bank Corp.,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in an e-mail.

Philippine National Bank Senior Equity Research Analyst Jonathan J. Latuja said in an e-mail that Ayala Corp.’s share price fell for the fourth consecutive week after declining by more than 4% this week, which underperformed the PSE index’s gain of 0.9% week on week.

“Likewise, Ayala Corp.’s largest subsidiary, ALI, dropped for the fourth consecutive week and ended 2.5% lower this week,” added Mr. Latuja.

Mr. Latuja also said that Ayala Corp. and ALI’s share prices dropped on profit taking after the announcement of its fourth quarter and full-year 2023 results.

“Moreover, for 2024 earnings, we project an 8% year on year growth in Ayala Corp’s top line,” Mr. Latuja said.

Mr. Limlingan saw a low double-digit year-on-year growth in Ayala Corp.’s first quarter in 2024 revenue as well as its net income after taxes (NIAT).

“Based on our models, we are seeing revenue to land at around P89 billion, while NIAT is just a bit below P12 billion,” said Mr. Limlingan.

The attributable net income of the country’s oldest conglomerate surged by 39% to P38.07 billion in 2023 from P27.4 billion in 2022.

For Ayala Corp.’s banking segment, BPI’s net earnings increased 44% to P51.7 billion in 2023. Total revenues rose by 17% to P138.3 billion due to better net interest and noninterest income.

Last week, in a disclosure to the PSE, BPI said it sold 752,056,290 common shares it gained from its merger with Robinsons Bank Corp. to digital lender GoTyme Bank Corp. at P1.20 per share or P902.47 million in total.

On real estate business, ALI’s net income rose 32% to P24.5 billion in 2023 driven by resilient property demand and heightened consumer activity fueled revenue expansion.

Property development revenues increased by 14% to P92.3 billion, while reservation sales improved by 9% to P113.9 billion.

ALI shares closed at P31.60 apiece on Friday, down 2.5% week on week.

For Ayala Corp.’s energy business, ACEN Corp. saw a decline in its reported net income to P7.4 billion in 2023 from P13.1 billion in 2022. The company’s consolidated revenues rose by 4% to P36.5 billion.

Meanwhile, Globe Telecom, Inc., Ayala Corp.’s telecommunications business, net income declined 29% in its 2023 net income to P24.6 billion due to the one-time gain on the partial sale of its data center business in 2022.

“Ayala Corp. is currently hovering around its support level, and we hold a bullish bias for the upcoming week, although the potential rebound for this stock may not be as robust due to anticipated low trading activity during the holy week. Meanwhile, we plot the resistance at P647 per share,” said Mr. Limlingan.