Megawide price target raised as 4PH housing lifts outlook

First Metro Securities raised its 12-month price target for Megawide Construction Corp. to P7.50 from P4.50, implying a 54.3-percent upside from the stock’s P4.86 close on Sept. 2.

The brokerage maintained its “buy” rating on the construction firm, citing stronger earnings and cash flow visibility from its participation in the government’s Expanded Pambansang Pabahay para sa Pilipino (4PH) program.

Megawide’s initial 16,700 units under the 4PH program are expected to generate more than P28.3 billion in additional revenue from the second half of 2026 to 2028, First Metro said. The program is expected to account for 36 percent of Megawide’s revenue by 2028.

“The MWIDE story has evolved from balance sheet repair into a 4PH-led transformation narrative,” First Metro said.

“Together with ongoing deleveraging and the potential establishment of regular dividends, we believe 4PH supports a higher valuation multiple and a firmer valuation floor for MWIDE,” it said.

Megawide earlier partnered with Pag-IBIG Fund to implement 4PH housing projects. Under the partnership, Pag-IBIG will invest P10 billion through perpetual preferred shares to support at least 7,000 affordable housing units over the next two to three years.

The partnership should also improve cash flow because collections will be tied to construction milestones and supported by Pag-IBIG-linked financing, First Metro said.

The P10-billion funding will also give Megawide an initial base for its broader affordable housing expansion. The company aims to develop 100,000 units over the long term, with the first 50,000 already identified in its five-year pipeline.

First Metro expects Megawide’s core construction business to provide a stable base as the 4PH program expands, while its Parañaque Integrated Terminal Exchange could gain from higher foot traffic following the opening of a new LRT-1 station.

Megawide resumed dividend payments, declaring a P0.145-per-share dividend in June, and plans to establish regular payouts starting in 2027.

A slower 4PH rollout, project execution delays, weaker demand for affordable housing and delays in Pag-IBIG-related collections could pose risks to the outlook, First Metro said.

The article was originally published in Manila Standard and written by Jenniffer B. Austria.

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