Kiatnakin Phatra Securities (KKPS) has raised its SET Index target for 2026 to 1,680, up from the previous 1,600, citing an increased contribution from DELTA, which now accounts for 19% of the index’s market capitalization. The upward revision comes after the SET Index posted a strong 26% gain in the first half of 2026, outperforming other ASEAN markets.
The SET ex-DELTA year-end target is maintained at 1,395, suggesting 6% growth from current levels. This target is based on a 15.2x P/E ratio and expected 9% EPS growth, reflecting a gradual economic recovery, improving capital management, and stable government policies favoring foreign direct investment and capital expenditure. Thai equities, excluding DELTA, are seen as attractive given their lower valuations compared to the ASEAN average, increased dividend potential, and relatively light foreign investor positioning.
For the remainder of 2026, KKPS expects global equity rotations to favor value stocks, particularly benefiting Banks and other liquidity-sensitive sectors. Despite some relief from lower war impacts and possible dividend surprises in the second quarter, earnings momentum is anticipated to be limited for the second half, especially for consumer sectors. Meanwhile, a weaker baht, influenced by continued U.S. Fed rate hikes and fiscal stress, could boost tourism but presents risks for rate-sensitive industries.
The brokerage recommends investors focus on individual stock selection rather than broad sector allocation in the coming months, shifting away from consumer stocks with limited growth prospects and increasing exposure to value, secular, and thematic growth opportunities, especially within Banks, Hospitals, Industrial Estates, and Hotels.
Key risks include a possible unwind of AI-related trades affecting DELTA’s high index weighting and potential contraction in market P/E ratios should the yield curve flatten further.
