Here’s What the Numbers Are Really Saying — And Why Filipino Investors Should Pay Attention

Before You Skip This Stock… Read This First

If you’ve been watching the Philippine stock market lately, you’ve probably noticed one thing: it can be really confusing. Prices go up, prices go down, and sometimes it feels like no matter what you do, you’re always late to the party.

Maybe you’ve heard of Ayala Corporation — the ticker is AC on the PSE. It’s one of the oldest and most recognized names in Philippine business. But here’s what most new investors don’t realize: being big and being a good investment are two very different things.

So is AC worth buying right now? Let’s break it down in plain, simple language — no jargon, no confusion. Just the facts, the analysis, and a clear answer you can actually use.

What Is Ayala Corporation? (Simple Version)

Ayala Corporation is what’s called a holding company. Think of it like this: instead of running just one business, Ayala owns pieces of many big companies — like a parent company with lots of children.

Here’s a quick look at its major businesses:

Subsidiary	FY25 Profit	Y/Y Growth	Status
BPI (Banking)	Php 66.6B	+7.4%	Strong
ALI (Property)	Php 30.5B	+8.2%	Resilient
GLO (Telco)	Php 20.9B	-2.8%	Challenged
ACEN (Energy)	Php 6.3B (core)	+4.0%	Recovering
IMI (Electronics)	US$13.5M	Turnaround	Back to profit
AC Health	Php 34M	Turnaround	Emerging

Real estate makes up the biggest chunk of revenue (about 53%), followed by telco, financial services, energy, and others. This diversification is both a strength and a challenge — more on that later.

What Happened in FY2025? The Key Highlights

Overall Earnings Grew — But at a Steady Pace

Ayala’s full-year 2025 earnings reached about Php 48.3 billion on a core basis, up 7.3% from the previous year. That’s not explosive growth, but it’s consistent and meaningful — especially when you consider that 2024 was a tough year for some of its major subsidiaries.

The last quarter of 2025 was particularly strong, with core profits jumping 41% compared to the same period a year ago. This surge was partly because the final quarter of 2024 was weak (a low baseline makes comparisons look better), but it also reflects genuine improvement across the group.

BPI Led the Charge

BPI, Ayala’s banking arm, continued to be the standout performer. Full-year profits came in at around Php 66.6 billion — a 7.4% increase. Strong loan growth, better interest income, and stable asset quality (their bad loan ratio actually improved) made BPI the most reliable engine in Ayala’s engine room.

ALI (Ayala Land) Showed Resilience

Ayala Land had a solid year despite some headwinds. Core profits grew around 8.2% to Php 30.5 billion. One of the highlights was the surge in estate lot revenues — these are large commercial land deals that carry bigger profit margins. Shopping centers also performed well, especially as new malls opened and occupancy improved.

Hotels and resorts were the fastest-growing segment within Ayala Land, benefiting from expanded room capacity and higher average rates. However, regular residential sales softened — likely due to cautious consumer sentiment during the period.

Globe (GLO) Hit a Speed Bump

GLO, the telecom subsidiary, saw full-year profits dip by about 2.8% to Php 20.9 billion. The main drag came from lower contributions from its financial technology operations, particularly those linked to online gaming revenue changes and some accounting policy adjustments. Mobile data revenues remained solid, though. This is a short-term challenge, not a structural collapse.

The Non-Core Units Are Turning Around

Here’s the most exciting development of 2025: the businesses that were losing money are now getting their act together.

IMI, the electronics manufacturing arm, swung from a significant loss in 2024 to a profit in 2025, thanks to cost-cutting, restructuring, and a sharper focus on high-margin business. AC Health also turned profitable for the first time, driven by a surge in patient volumes and a successful divestment. AC Logistics and AC Mobility both narrowed their losses substantially, with both expected to improve further in 2026.

This matters because these units were previously dragging down the whole group. Their turnaround signals that management is serious about efficiency — and that the earnings recovery story has more chapters to come.

My Analysis: What This Really Means for You as an Investor

Here’s the honest assessment: Ayala is a company in transition. The core businesses (banking and property) are performing well. The weaker units are improving. Management is prioritizing efficiency, better capital allocation, and higher dividends.

But here’s the catch — Ayala is also a massive conglomerate. That means it comes with complexity. It can be hard to see the full picture because there are so many moving parts. And when the market is uncertain, conglomerates tend to trade at a discount compared to pure-play companies.

So the real question isn’t ‘Is Ayala a good company?’ It obviously is. The real question is: ‘Is Ayala stock trading at a good price right now?’

Let’s do the math.

My Independent Valuation: What Is AC Really Worth?

Step 1: Identify the Right Valuation Approach

Ayala Corporation is a holding firm — a company that owns stakes in many other businesses. The right way to value a holding firm is through what analysts call a Sum-of-the-Parts (SOTP) approach, combined with an earnings-based model. For simplicity, I’m anchoring this valuation on earnings power, using a sector-appropriate P/E multiple.

Step 2: Establish Normalized Earnings

Ayala reported core EPS (earnings per share) of roughly Php 77.87 in FY2025, with FY2026 expected to grow to around Php 84.83. I’ll use the FY2026 forward estimate as my valuation anchor, since investors buy future earnings, not past ones.

Step 3: Determine the Right Earnings Multiple

For Philippine holding firms, a reasonable base P/E range is 8x to 12x. But we need to adjust based on Ayala’s specific qualities:

• ROE is around 10.4% in FY2025 — decent, but still below the 12% threshold for a premium rating. No upward ROE adjustment.
• EPS growth of about 16.5% for FY2026 — this is genuinely strong. +1x adjustment.
• Conglomerate complexity and multiple layers of corporate structure: -1x discount.
• Non-core units turning around — adds confidence to the earnings story. +0.5x adjustment.

Starting from a base of 8x, and applying all adjustments: 8 + 1 – 1 + 0.5 = 8.5x adjusted P/E.

Step 4: Calculate Fair Value

Fair Value = FY2026 EPS × Adjusted P/E = Php 84.83 × 8.5 = approximately Php 720.00 per share.

Step 5: Apply Margin of Safety

For holding firms, a margin of safety of 25%–35% is appropriate because of their complexity and the risks of multiple subsidiaries. I’ll apply a 30% margin of safety, which gives a Buy Below Price of:

Buy Below Price = Php 720.00 × (1 – 0.30) = Php 504.00

Valuation Item	Detail	Value
Sector Classification	Holding Firm (SOTP)	—
Normalized EPS (FY25 Actual)	Based on reported profits	Php 77.87
Forward EPS Estimate (FY26)	~16.5% growth applied	Php 84.83
Base P/E for Holding Firms	SOTP framework	8x – 12x
Adj: ROE ~10.4% (FY25E)	Below 12% threshold	No upward adj.
Adj: EPS Growth ~16.5% (FY26E)	Strong growth, +1x	+1x
Adj: Conglomerate Discount	Complex structure, -1x	-1x
Adj: Turnaround in non-core units	Positive momentum, +0.5x	+0.5x
Adjusted P/E Applied	8 + 1 – 1 + 0.5 = 8.5x	8.5x
Fair Value Estimate	FY26E EPS x 8.5x	Php 720.00
Margin of Safety Applied	25–35% for holding firms	30%
BUY BELOW PRICE	Fair Value x (1 – 0.30)	Php 504.00
Current Price (as of April 3, 2026)	Market price	Php 534.00
Upside to Fair Value	(720 – 534) / 534	+34.8%

The Risks You Should Know About

1. Conglomerate Complexity

Ayala is made up of many companies with very different business models. When one unit disappoints (like GLO’s telco profits dipping), it can overshadow the positive news from others. This complexity also makes valuation harder and can depress the market price.

2. High Debt Levels

Ayala carries a significant debt load, which is typical for large conglomerates, but it’s worth watching. Rising interest rates can put pressure on earnings, especially for property and infrastructure businesses that rely on long-term financing.

3. GLO and GCash Uncertainty

The telecom business is facing headwinds from accounting policy changes and the loss of online gaming-related revenues. GCash — the mobile wallet that has been a major growth story — saw earnings decline sequentially in late 2025. How quickly this recovers is a key variable.

4. Property Sector Softness

While Ayala Land had a decent year overall, residential property revenues actually fell. Weak consumer sentiment, high borrowing costs, and general economic uncertainty could continue to weigh on this segment.

5. Execution Risk on Turnarounds

The improving trajectory of IMI, AC Health, AC Logistics, and AC Mobility is encouraging — but these turnarounds are still works in progress. If they stall or reverse, the earnings story changes meaningfully.

The Bottom Line: Should You Buy AC?

Ayala Corporation is one of the strongest business empires in Philippine history. Its core units — banking and property — are performing well, its weaker units are improving, and management is prioritizing efficiency and higher dividends. The earnings growth trajectory is real.

Based on our earnings-based valuation, the stock has a fair value of around Php 720.00, implying about 34.8% upside from the current price of Php 534.00. Our recommended Buy Below Price — with a proper margin of safety — is Php 504.00.

At the current price, the stock is slightly above our ideal entry point. That doesn’t mean it’s a bad investment — it means you should be patient. If the price dips toward Php 504.00 or below, that’s when the opportunity becomes most compelling.

If you’re already holding AC and your cost is well below current levels, you’re in a good position. If you’re considering buying now, consider building your position gradually rather than going all in at once.

The long-term story for Ayala remains intact. The Philippines is growing, and Ayala is positioned right at the heart of that growth — in banking, real estate, energy, and infrastructure. Patience and discipline are your greatest allies here.

DISCLAIMER: This article is for educational and informational purposes only. It is not financial advice. Always do your own research or consult a licensed financial advisor before making investment decisions. Investing in stocks carries risk, including the possible loss of principal.