MAYBANK Investment Banking Group has reinitiated a 'buy' recommendation for Manila Electric Co. (Meralco/stock code MER), with a target price of P516 per share, given the company's role as the sole distribution utility in Metro Manila and its expanding generation portfolio.
'Our target price implies an EV/Ebitda (enterprise value to its earnings before interest, taxes, depreciation and amortization) multiple of 9.1x, which is in line with MER's 5-year average of 9.2x,' Maybank said in a report last week.