Credit Sights keeps Globe at ‘outperform’ rating

FINANCIAL research firm CreditSights said it is maintaining Globe Telecom’s “outperform” recommendation in its report. The firm said this was due to Globe’s benchmark July-31 bond issue having outperformed PLDT’s January-31 bond issue.

“Globe’s Jul-30 now trades 32 basis points wider than PLDT’s c.Jan-31, from 74 basis points on June 20, 2022. Globe’s perpetual bond c.Aug-26 also trades at its all-time wide at 2.1x perp-to-senior multiple, which makes it look attractive from a relative value standpoint, but we remain cautious on the perp given the current market aversion to perps in general owing to non-call concerns amid high interest rates,” CreditSight explained.

The firm also acknowledged that Globe could be challenged by rising macroeconomic headwinds and mounting competitive pressures from new mobile entrant DITO but believes the impact will be well mitigated by Globe’s leading, wellentrenched market position in the mobile market segment.

“We expect Globe to post steady growth in its revenues and Ebitda (earnings before interest, taxes, depreciation and amortization), and maintain a solid, resilient fundamental credit profile,” the firm added.

This is supported by Globe’s third-quarter results as its mobile data revenues gained 8 percent year on year to P63 billion in the first nine months of 2022. This is on the back of resilient subscriber demand that outweighed strong competition, both from main rival PLDT and new entrant DITO, and higher first-quarter 2022 churn from Typhoon “Odette.”