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Investing.com - Morgan Stanley downgraded Universal Robina (OTC:UVRBF) from Overweight to Equalweight on Friday, while reducing its price target to PHP89.00 from PHP108.00.
The downgrade comes as the investment bank lowered its EBIT estimates by 5-7% for 2025-27, driven by cuts in BCF margin assumptions despite revenue forecasts remaining largely unchanged.
Morgan Stanley now expects BCF operating profit margin at 11% in 2025, down from its previous estimate of 12.4%, with improvement to only 11.5% in 2026 as the firm anticipates some recovery in coffee margins will be reinvested to strengthen market share.
The bank projects modest EBIT growth of approximately 1.6% year-over-year in 2025 and 13% in 2026 for the Philippines-based food and beverage company.
Additionally, Morgan Stanley updated its weighted average cost of capital assumption from 11.4% to 12% to reflect the latest risk-free rate and beta for the stock, with the risk-free rate falling to 5.9% from 6.1% and beta increasing to 1.1 from 1.0.
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