URC Stock Declines Despite Production Growth
Last week, Universal Robina Corp. (URC) saw a drop in its shares despite the unveiling of a new flour mill in Quezon. URC, a leading food and beverage company, experienced a 3.6% decrease in its stock price, closing at P76.15 per share. Throughout the week of December 2-6, 14.26 million shares, valued at P1.11 billion, were traded.
Analysts pointed to various factors contributing to the stock’s decline. The release of URC’s earnings report on November 12, coupled with higher inflation in November, continued to impact investor confidence. The company reported a 53.7% decrease in net income for the third quarter, along with a 1.81% drop in revenues.
Despite the opening of a new flour mill in Quezon, which is expected to boost URC’s production capacity, investors remained focused on the challenges facing the company. These challenges include negative price mix, struggling feed volumes, and decreased sugar profits.
Looking ahead, analysts forecast a consolidated net income of P2.4 billion for URC, with an expected 6% growth in revenue. Support levels for the stock are estimated between P73-75.8, with resistance levels at P80.25-86.25. To shift the bearish trend, URC would need to recover and sustain levels above P86 in the short term.
Overall, while the recent capacity expansion is viewed as positive news, the broader challenges affecting URC dampened investor sentiment last week. The company continues to navigate through these obstacles as it strives for future growth and success.
