According to First Metro Securities (FMS), led by research head Mark Angeles, a confluence of macro tailwinds such as easing inflation, steady employment, and rising consumer credit is fueling optimism in the Philippine consumption story.
The June 12 report, penned by Estella Dhel Villamiel and Angelique Baccay, suggests that consumer stocks are now in favor but cautions that changing spending habits and rising competition mean not every consumer stock will make the cut.
“While the overall outlook for consumption remains positive, we anticipate that revenues will be shaped by evolving trends and structural shifts,” FMS said in the report.
“The outcome of ongoing tariff negotiations remains a wildcard, with the potential to either support or hinder sector performance. In this context, selectivity is critical,” it added.
Consumer sentiment rebound
"Consumer confidence dipped in [the first half of 2025] amid concerns over political noise and uncertainty around governance continuity," FMS continued.
"However, forward-looking sentiment remains upbeat, supported by expectations of higher income, job availability, wage growth, and price stability. According to the BSP, consumer confidence is strongly influenced by stable inflation and favorable labor market conditions," it added.
Top consumer plays
It ranked five top consumer picks, all rated as buys, in the following order of preference: Puregold Price Club (PGOLD), SM Investments (SM), Robinsons Retail Holdings (RRHI), Jollibee Foods Corp. (JFC), and Wilcon Depot (WLCON).
The five stocks stood out for their wide consumer reach, strong brand equity, and pricing power—critical traits for maintaining margins and defending market share amid rising competition and changing demand.
Retail kings and fast food
Puregold Price Club Inc. (PGOLD) with a target price (TP) of P36 per share
• Leading grocery retailer in the Philippines with macro tailwinds from disinflation and a stronger peso.
• Margin upside potential from S&R and ongoing dividend improvements.
• Active corporate governance reforms, including efforts to raise the dividend payout ratio and elect independent directors.
SM Investments Corp. (SM): TP at P1,050
• Resilient, domestic-focused portfolio across retail, banking, and property.
• Shareholder returns enhanced via a 6 percent buyback plan and higher dividends.
• First-ever special dividend signals stronger capital return focus.
Robinsons Retail Holdings Inc. (RRHI): TP at P47
• Dairy Farm exit boosts return on equity (ROE) outlook and capital efficiency.
• ROE recovery on track, approaching pre-acquisition levels.
• Possible MSCI weight increase seen as a near-term catalyst.
Jollibee Foods Corp. (JFC): TP at P330
• Strong domestic operations drive growth, offsetting overseas softness.
• First quarter 2025 metrics already exceed full-year targets in sales and income.
• Consistent execution supports confidence in outlook.
Wilcon Depot Inc. (WLCON): TP at P9
• Earnings seen bottoming out in the first half of 2025 after index exclusion headwinds.
• Well-positioned to recover, backed by peer-leading dividend yield.
• Fundamentals support long-term stabilization and upside.
—Edited by Miguel R. Camus
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