In a Dec. 23 report by research head Mark Angeles and Estella Dhel Villamiel, the brokerage house upgraded Emperador Group to a “buy” and raised its target price to P18.90 per share.
‘[W]we believe EMI’s intrinsic value is understated under traditional methodologies,” FMS said.
This represents an upside of about 21 percent since the call was made. Emperador last closed at P15.88 per share, valuing the company at about P250 billion.
Largest brandy producer
Emperador is the world’s largest brandy producer and also owns premium Scotch whisky brands under its Whyte & Mackay unit, led by The Dalmore.
In its report, First Metro Securities said it shifted to a sum-of-the-parts valuation, arguing that traditional methods fail to capture how Emperador’s two businesses create value in very different ways.
Brandy segment to grow by 20%
On brandy, the brokerage said a rebound is underway, with management guiding for 20 percent revenue growth in 2026, driven by new products such as Fundador Super Special and CLVB EMPI.
These brands are gaining traction across both value-focused and younger consumers, which First Metro expects to lift volumes and improve margins.
As a result, the brokerage is projecting 20 percent annual growth in earnings before interest, taxes, depreciation, and amortization (EBITDA) for the brandy segment over the next two years.
Whisky gold mine?
The bigger upside, however, sits in whisky, where Emperador holds stocks that increase in value as they age, unlike most inventory that typically loses value over time.
Management estimates the brokerage value of its whisky inventory at £1.4 billion, which First Metro said is equivalent to about P110 billion, even before accounting for the premium attached to luxury brands like The Dalmore.
“As casks age, whiskey becomes rarer and more desirable,” FMS said in the report.
“Brokerage markets capture this appreciation curve in real time, unlike accounting inventory, carried at cost. Thus, assuming the company liquidates all whisky inventory today, this means EMI could realise approximately P110 billion value from liquid alone, before factoring in brand premiums and luxury positioning,” it added.
Recent events
The Government Service Insurance System recently raised its stake in Emperador Inc. from about 4.4 percent to 5.23 percent after buying 131.3 million shares.
This brings its holdings to 823.2 million shares worth over P13 billion, based on its recent closing price.
—Edited by Miguel R. Camus
