Unicapital trims PSEi target to 6,800 

Unicapital Securities Inc. has lowered its Philippine Stock Exchange Index (PSEi) target to 6,800 for 2026, reflecting a more cautious but still constructive stance as the economy navigates external risks and awaits clearer policy direction.

Unicapital said on Tuesday that the revised target implies about a 12-percent upside from end-2025 levels, but is more conservative than the firm’s earlier projection of 7,100.

The adjustment comes even as Unicapital sees improving domestic conditions anchored on infrastructure spending, governance reforms and a more supportive monetary environment.

“Our strategy for 2026 is defensive yet opportunistic,” said Wendy Estacio-Cruz, head of research at Unicapital Securities. “We are prioritizing balance sheet strength and earnings visibility while maintaining selective exposure to structural growth themes.”

Despite the tempered outlook, Unicapital said Philippine equities remain attractive on a valuation basis.

The PSEi is currently trading at about 10 times price-to-earnings, significantly below its 10-year average of 16.4 times and still lagging regional peers.

Unicapital said this valuation gap reflects cautious investor sentiment rather than structural weakness, presenting opportunities as corporate earnings improve. It added that this could pave the way for a rotation back into Philippine equities as confidence returns.

Unicapital’s outlook for this year is underpinned by expectations of an economic rebound, with gross domestic product growth projected to reach 5.2 percent in 2026. This recovery will likely be driven by the resumption of public infrastructure spending, improved policy execution and governance reforms aimed at boosting transparency and investor confidence.

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The firm also noted that inflation remains manageable, giving the Bangko Sentral ng Pilipinas (BSP) room to support domestic demand if needed.

However, BSP officials have cautioned that inflation could see a slight uptick due to supply-side pressures, requiring continued vigilance.

Unicapital emphasized that household consumption, which accounts for roughly 75 percent of the economy, will remain the main growth driver. This is expected to be reinforced by steady remittances and resilient revenues from the business process outsourcing sector.

Still, risks remain. The firm also flagged geopolitical tensions, trade imbalances and shifting global interest rate dynamics as key external threats that could affect market performance.