What is fascinating about business valuation is that analysts will come up with opposing estimated economic values despite using the same financial information. This was the case of renowned stock brokerage companies, First Metro Securities Brokerage Corporation (FMSBC) and COL Financial Group Inc (CFGI), with the release of their respective business valuation on Ayala Land Inc (ALI). The business valuation debate did not start on the reasons behind the share price performance of ALI but from the scope and scale of the business conundrum hounding the company. The share price of ALI decreased by 34.08% from P22.45 on 29 December 2025 to P14.80 on 30 June 2026. Although both stock brokerage companies rated ALI with a buy recommendation, FMSBC fixed its share price target at P15.50 or a 4.73% upside while CFGI fixed its share price target at P33.70 or a 127.70% upside. The extensive discrepancy between the share price targets was the result of the contradictory interpretation and appreciation of the company financials and business potential. FMSBC stated that its low share price target is due to the high financing costs, low property demand and leveraged balance sheet while CFGI argued that its high share price target is due to the erroneous distress outlook, excessive negative sentiment and severe business undervaluation. FMSBC underscored the fact that the residential segment of the property industry was engulfed by high interest rates and low home purchases which persuaded ALI to suspend the construction of Laurean Residences in Makati City and to cancel the development of Katipunan Heights in Quezon City. It is worth mentioning that since its incorporation in 1988, a project suspension or a project cancellation by ALI is unheard of despite navigating through periods of decreasing economic growth or increasing inventory level. On the other hand, CFGI quantified the fact that ALI has an estimated P1 trillion in total assets, P86.3 billion in retained earnings and maintains an investment-grade credit profile which means that its business is facing a cyclical downturn rather than a financial distress. Its recurring leasing business from the operation of its industrial, commercial and hospitality properties produce enough cash flow to cover debt servicing requirements. To conclude this business valuation debate, we have made our own calculation using a discounted cash flow analysis and we have computed that the fair equity value per share of ALI is P28.39. We recommend ALI with a buy near the share price target of FMSBC and a sell near the share price target of CFGI. Case closed.
