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COL Financial Keeps 7,500-Point Target for Philippine Stock Index Amid Middle East Tensions
COL Financial, a leading Philippine brokerage, has reaffirmed its year‑end target of 7,500 points for the Philippine Stock Exchange composite index (PSEi) even as the market grapples with uncertainty sparked by the Middle East conflict.
"The market remains undervalued," the firm said, adding that a 25 % probability of reaching the target this year is still on the table.
The target hinges on a price‑to‑earnings (P/E) multiple of 12, roughly one standard deviation below the index’s historical average. Chief equity strategist April Lynn Tan explained that the PSEi is currently trading at about nine times earnings. "We’re at around nine times P/E now. If we move to 12 times, which is still very cheap historically, that brings the index to around 7,500," Tan said during the firm’s mid‑year market outlook briefing on Monday. She noted that the odds of the index hitting 7,500 this year are about 25 %.
Chief technical analyst Juanis Barredo added that the index sits only about three percent below the level it reached before the U.S.–Iran war, suggesting a return to pre‑war highs could be feasible within the year. "The major high stands at around 6,650, which is the first resistance zone. If the market manages to break that range, it opens the possibility of moving back [up] toward the 7,400‑7,500 area," Barredo said. He cautioned that reaching that range would likely take several months and depend on the market sustaining its recovery above key resistance levels. "The recent rebound suggested the market had found support after its correction and could continue its recovery path instead of revisiting recent lows," he added.
Oil prices loom large in the outlook, Tan said. "Lower crude prices could ease inflationary pressures, strengthen the peso, reduce interest rates and support corporate earnings," she noted. She also observed that investor sentiment, initially hit hard by the war, has improved as oil prices moderated.
The Bangko Sentral ng Pilipinas’ business expectations survey shows sentiment recovering after a dip in March. Firms now expect stronger business activity and increased hiring over the next 12 months. "While companies remain cautious about expansion plans, they are becoming more optimistic as lower oil prices improve the economic outlook," Tan added.
On Monday, the PSEi closed at 6,415.72, up 11.61 points or 0.18 %. The index has finished four consecutive sessions higher, but it still sits well below COL Financial’s target. The brokerage’s outlook remains cautious, noting that the market could still face setbacks.
In summary, COL Financial’s year‑end target of 7,500 points for the PSEi is anchored to a 12‑times P/E valuation—a level that is historically cheap but still carries a 25 % probability of being reached this year. Technical analysis suggests the index is close to pre‑war levels and could break through the 6,650 resistance zone, but doing so would require sustained gains over several months. Lower oil prices and improving business sentiment are positive factors, yet the market remains vulnerable to geopolitical and economic shocks. Investors and analysts will continue to watch the PSEi’s performance, oil price movements, and corporate earnings reports for signals that the index may move toward the 7,500‑point target.
"The market remains undervalued," the firm said, adding that a 25 % probability of reaching the target this year is still on the table.
The target hinges on a price‑to‑earnings (P/E) multiple of 12, roughly one standard deviation below the index’s historical average. Chief equity strategist April Lynn Tan explained that the PSEi is currently trading at about nine times earnings. "We’re at around nine times P/E now. If we move to 12 times, which is still very cheap historically, that brings the index to around 7,500," Tan said during the firm’s mid‑year market outlook briefing on Monday. She noted that the odds of the index hitting 7,500 this year are about 25 %.
Chief technical analyst Juanis Barredo added that the index sits only about three percent below the level it reached before the U.S.–Iran war, suggesting a return to pre‑war highs could be feasible within the year. "The major high stands at around 6,650, which is the first resistance zone. If the market manages to break that range, it opens the possibility of moving back [up] toward the 7,400‑7,500 area," Barredo said. He cautioned that reaching that range would likely take several months and depend on the market sustaining its recovery above key resistance levels. "The recent rebound suggested the market had found support after its correction and could continue its recovery path instead of revisiting recent lows," he added.
Oil prices loom large in the outlook, Tan said. "Lower crude prices could ease inflationary pressures, strengthen the peso, reduce interest rates and support corporate earnings," she noted. She also observed that investor sentiment, initially hit hard by the war, has improved as oil prices moderated.
The Bangko Sentral ng Pilipinas’ business expectations survey shows sentiment recovering after a dip in March. Firms now expect stronger business activity and increased hiring over the next 12 months. "While companies remain cautious about expansion plans, they are becoming more optimistic as lower oil prices improve the economic outlook," Tan added.
On Monday, the PSEi closed at 6,415.72, up 11.61 points or 0.18 %. The index has finished four consecutive sessions higher, but it still sits well below COL Financial’s target. The brokerage’s outlook remains cautious, noting that the market could still face setbacks.
In summary, COL Financial’s year‑end target of 7,500 points for the PSEi is anchored to a 12‑times P/E valuation—a level that is historically cheap but still carries a 25 % probability of being reached this year. Technical analysis suggests the index is close to pre‑war levels and could break through the 6,650 resistance zone, but doing so would require sustained gains over several months. Lower oil prices and improving business sentiment are positive factors, yet the market remains vulnerable to geopolitical and economic shocks. Investors and analysts will continue to watch the PSEi’s performance, oil price movements, and corporate earnings reports for signals that the index may move toward the 7,500‑point target.
