At its current level, the PSEi is trading at a forward P\/E of 10.1x — a discount to its 10-year forward mean P\/E of 12.8x and -1SD away from its mean P\/E. <\/p>\n\n\n\n
Our base case index target is 7,300 \u2013 translating to a further 5% upside. This is supported by our forecasts of 10.3% EPS growth and 5.7% GDP growth, premised on easing inflation and interest rate. Any positive surprises from earnings and macro could lead us towards our blue-sky target of 8,100. <\/p>\n\n\n\n
Our top picks: SM, AC, JGS, JFC, URC, ALI, MBT, ICT<\/p>\n\n\n\n
Earnings revision trend has been positive so far, with consensus forecast up 2% and 3% over the past 1 month and 3 months, respectively, led by Banks, Property and Consumer.<\/p>\n\n\n\n
Amid attractive valuation, lingering macro concerns (inflation mainly) plus liquidity
are among the issues which dissuade investors (especially foreign) from fully committing to the Philippine market.<\/p>\n\n\n\n
Thus, the removal of the macro overhang and a pick-up in liquidity could be the catalysts which could fuel the market\u2019s push towards the 7,300 level and beyond. Note that based on aggregated 12-month target prices (bottom-up view from Bloomberg), the street is looking at a more aggressive index target of 8,337.<\/p>\n\n\n\n
23 out of the 30 index firms have reported 4Q 2023 results already. So far, 4Q 2023 earnings were up by 9% year-on-year (y-y) while 2023 earnings grew by 15.5% y-y.<\/p>\n\n\n\n
4Q 2023 earnings scorecard: 61% in-line, 26% misses and 13% beats. In contrast, 3Q23 saw beats outpace misses.<\/p>\n\n\n\n
Banks (+29.3% y-y), Properties (+32.4% y-y), Conglos (+28.8% y-y) and Gaming (+85.2% y-y) led in terms of growth. Power and Consumer firms posted high single-digit growths while Telcos, Mining and Transport segments showed negative growth.
The notable misses include BLOOM, ACEN, URC, WLCON. NIKL and SCC<\/p>\n\n\n\n