Puregold Price Club's Gross Profit Margin Likely to Decline Amid Cost Headwinds — Market Talk

Puregold Price Club's gross profit margin is likely to decline amid cost headwinds, SB Equities' Andrea Marielle Oliveros says in a research report. At an analysts' briefing, management said it expects supply of newer merchandise to arrive at higher costs and anticipates GPM for the Philippine operator of supermarket and hypermarket chains to soften, the analyst notes. Following the recent rally of the company's share price, SB Equities downgrades the stock's rating to hold from add, partly because the rally has shifted risk-reward to neutral. It also lowers the stock's target price to 47.20 pesos from 48.00 pesos to reflect updated valuation inputs. Shares are 1.7% higher at 46.65 pesos. (ronnie.harui@wsj.com)