Ayala Corp: Risk Reward Update

Research evidence excerpt

Ayala Corp: Risk Reward Update

UpdateM

RiskRisk RewardReward– Ayala -CorpAyala(AC.PS)Corp (AC.PS)

Underowned and undervalued

PRICE TARGET PP640.00 OVERWEIGHT THESIS

Base case, derived from SoTP. We use Morgan Stanley Research price targets to value AC's ▪Underowned: Foreign investors appear to

holdings in MS-covered listed entities Ayala Land, BPI, and Globe. For non-covered listed be underweight on AC.

entities such as ACEN, we use these stocks' trading market caps. For unlisted entities, we ▪Robust earnings growth: EPS growth

have largely valued them using their carrying values or total invested capital. We apply a 34% returning to pre-Covid levels in the mid-

conglomerate discount, in line with its five-year average. teens supports the case for P/E to re-rate

toward pre-Covid levels of ~12x. PP759.33

AC is trading at aConsensus Price Target Distribution PP640.00 PP916.00 ▪Attractive valuation: discount to RNAV wider than its five-year MS PT

Source: Refinitiv, Morgan Stanley Research Mean Morgan Stanley Estimates average of 34%; and AC's market cap is at a

substantial discount to the sum of its stakes

in its four largest listed businesses.

RISK REWARD CHART

Consensus Rating Distribution

PHP 100%Overweight

0% Equal-weight

PP990.00PP990.00(+121.97%)PP990.00(+121.97%)(+121.97%)

0% Underweight

1000 MS Rating

Source: Refinitiv, Morgan Stanley Research

PP640.00PP640.00(+43.50%)PP640.00(+43.50%)(+43.50%) Risk Reward Themes

500 PP446.00PP446.00PP446.00 Renewable Energy: Positive

Special Situation: Positive

Technology Diffusion: Positive

250 PP370.00PP370.00(-17.04%)PP370.00(-17.04%)(-17.04%)

View descriptions of Risk Rewards Themes here

MAY '25 NOV '25 MAY '26 MAY '27

Key: Historical Stock Performance Current Stock Price Price Target