Equity Strategy - Philippines: 2026E earnings growth cut to zero, though a 2027E rebound anticipated

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Equity Strategy - Philippines: 2026E earnings growth cut to zero, though a 2027E rebound anticipated

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Equity Strategy - Philippines

2026E earnings growth cut to zero, though

a 2027E rebound anticipated

Equity Strategy

Core Index earnings growth slowed to 4% in 1Q26 26 May 2026

Core earnings of the 30 components of the PSE Index grew 4%, slowing from 9% in Equity Strategy

4Q25 but consistent with the slowdown in GDP (to 2.8%) seen in 1Q26. Revenue growth ASEAN | Philippines

continued to improve, growing 9% in 1Q26 from 5% in 4Q25. The divergence between Jojo Gonzales ^^

revenue and core profit in 1Q26 suggests a squeeze on margins, operating, or financing Research Analyst

costs. Nonetheless, 15 of 30 Index stocks accounting for 74% of index capitalization Philippine+63 2 8640Equity6767Partners

reported 1Q26 results that were in line with our FY26E expectations. 5 missed and 6 jojo.gonzales@pep.com.ph

beat. (See Exhibits 1-5). Philip Albert Felix ^^

Research Analyst

Zero 2026E earnings growth, 8% rebound seen in 2027E Philippinephilip.felix@pep.com.phEquity Partners

Despite half of 1Q26 results appearing in-line with our FY26E expectations, the Julian Roxas ^^

subsequent revisions were mostly downward. We reduced 2026/27E EPS estimates in ResearchPhilippineAnalystEquity Partners

10 of 18 revisions. We lowered PO in 12 of 16 revisions. We also downgraded the rating julian.roxas@pep.com.ph

on Jollibee (JFC) to Neutral, and on Universal Robina (URC) to Underperform. Back in Russ Toribio ^^

April, we placed 2026E Index earnings growth at 7%. Given these, Index earnings for ResearchPhilippineAnalystEquity Partners

2026E is reduced to zero, weighed down by conglomerates, consumer and property. A russ.toribio@pep.com.ph