To help investors capture the upside, its research team, led by Wendy Estacio-Cruz, highlighted their top three stock picks that offer strong value.
These are the Ayala Group’s AREIT Inc., tycoon Lucio Co’s Puregold Price Club and Maynilad Water Services, backed by Metro Pacific Investments and DMCI Holdings.
AREIT expansion case
AREIT was given a price target of P49.50— a 14 percent upside from its Monday closing price.
“AREIT is really poised to have strong expansion in terms of their portfolio and they’re really committed to increasing their portfolio by P15–20 billion annually,” Estacio-Cruz said during a media briefing on Tuesday.
“If we compare AREIT to other names, it really has a good balance sheet and capacity to support its expansion plans going forward,” she said, adding that the stock is paying an annual dividend 6 percent yield.
Puregold dividends story
Puregold (PGOLD) was given a price target of P52.50 per share, upside at about 30 percent.
“We like that Puregold is still undervalued,” said Unicapital analyst Jeri Alfonso.
“We want to note that the company has more reason to be generous now especially with their earnings at an all-time high,” she said.
“Last year, they declared special dividends, which yielded 6 percent, and now we are expecting another special dividend for this year,” she added.
Maynilad growth drivers
Maynilad was given a price target of P23 per share, an upside of 11 percent.
“We believe that Maynilad will perform better this year… this is really underpinned by growth in terms of tariffs as well as billed volume growth,” said Peter Garnace, Unicapital equity research analyst.
“And second is in terms of its expansion plans as well as improvement in its operations in terms of the non-revenue water,” he said.
“Another driver for Maynilad would be the potential inclusion in the benchmark index by August 2026,” he said, adding that this assumption was already baked into the P23 price target.
Macro outlook
Despite the cautious environment, Estacio-Cruz said they’re expecting the Philippine Stock Exchange Index to reach 6,800, implying approximately 12 percent upside from end-2025 levels.
There’s reason for investors to remain cautious, given the overhang from the flood control corruption scandal and its impact on infrastructure spending during the first half of 2026.
Estacio-Cruz also expects the Bangko Sentral ng Pilipinas to pause rate hikes after its 25 basis point cut last week.
“We’re seeing a pause for at least the next two meetings and probably we’ll see another 25 basis point rate cut by the latter part of the year,” she said.
With the Philippines trading half the value of its regional peers, there’s a strong case for money to flow back into local equities.
“There’s scope for rotation in the PSEi this year,” she said.
