Kuya Food Express – JAKARTA. The momentum of the Jakarta Composite Index (IHSG) is projected to slow down in 2026, falling short of earlier, more optimistic forecasts. This revised outlook is primarily driven by the persistent weakening of the rupiah against the US dollar and a significant surge in global oil prices, both of which are substantially influencing the IHSG’s trajectory through the end of 2026.
Prasetya Gunadi, Head of Research at Samuel Sekuritas, announced that the firm has revised its year-end 2026 target for the IHSG down to 7,500. This projection is underpinned by an assumed earnings growth of only 2% and a fair Price-to-Earnings (P/E) ratio multiple of 12.3 times.
In a more optimistic, bullish scenario, the IHSG could potentially reach 8,000, driven by an earnings growth of 5% and a fair P/E multiple of 12.9 times.
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Conversely, under a bearish scenario, the IHSG is anticipated to decline to 6,300, reflecting a negative earnings growth of 3% and a fair P/E multiple of 10.9 times.
“Initially, our earnings growth target was set at 5%, but we have lowered it to 2%. So, we reduced it by one level. The reasons for this adjustment are the rupiah’s performance and rising oil prices,” Prasetya elaborated during a Media Connect event on Thursday, May 7, 2026.
He further projected that the rupiah’s value could reach Rp 17,500 per US dollar in the baseline scenario. A bearish outlook could see the rupiah weaken beyond Rp 18,000 per US dollar, while a bullish scenario would see it strengthen below Rp 17,000 per US dollar.
Prasetya also warned that if the rupiah exchange rate were to break past the Rp 18,000 per US dollar mark, it would significantly impact sectors ranging from consumer staples to banking, potentially affecting asset quality across the board.
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Adding to the cautious sentiment, RHB Sekuritas Indonesia has also revised its IHSG target downwards to 8,100, reflecting a P/E valuation of 13.9 times. This marks a significant cut from their initial projection, which anticipated the IHSG soaring to 9,400.
Andrey Wijaya, Head of Research at RHB Sekuritas Indonesia, attributed this updated projection to an expected earnings growth of approximately 8.9%–10% for the full years 2026–2027. He explained in a research report released on Monday, May 4, 2026, that this outlook is supported by resilient domestic demand despite external uncertainties and domestic challenges, along with stable liquidity and a gradual normalization of earnings in key sectors.
In a more constructive scenario, the IHSG could potentially ascend to 8,700, with a P/E valuation of 15 times. This optimistic trajectory would be fueled by an improved risk appetite, stronger earnings realization, and more supportive macroeconomic conditions.
“However, given the lingering uncertainties surrounding global interest rates, commodity volatility, and policy directions, we see limited room for significant valuation expansion,” Andrey cautioned.
On the downside, he elaborated, a bearish scenario could see the index fall to 6,800, with a P/E valuation of 11.7 times. This reflects the potential for external shocks, weakening market sentiment, and risks to corporate earnings that could trigger deeper valuation compression.
Andrey identified several key sectors as primary drivers of RHB Sekuritas Indonesia’s constructive outlook: banking, consumer, coal, healthcare, metals mining, oil and gas, poultry, property, renewable energy, and telecommunications.
“However, pressures are emerging from tight liquidity, the weakening rupiah, rising costs, and declining purchasing power among lower-income communities, causing market attention to shift towards medium-term risks,” he noted.
Hadi Soegiarto, Head of Research at CGS International Sekuritas Indonesia, added that persistent high oil prices, seasonal rupiah weakness in the second quarter, and potential short-term passive fund outflows are further weighing on the IHSG.
“Investor pessimism is expected to peak in May or June, potentially creating an opportune entry point for investments, particularly as many companies’ valuations are approaching their lowest levels in the last decade,” he explained.
CGS International Sekuritas favors stocks such as BBNI, MEDC, DNSG, TAPG, EXCL, ARCI, CRMY, HMSP, GGRM, and WIIM. Hadi noted that while their selected stocks still lean heavily towards the commodity sector, CGS International continues to monitor opportunities in non-commodity stock markets.
Meanwhile, Samuel Sekuritas recommends a ‘buy’ for ANTM with a target price of Rp 4,600. Prasetya highlighted that ANTM’s performance in 2026 is beginning to show improved sales volumes, supported by rising global gold prices.
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Samuel Sekuritas also suggests a ‘buy’ for BUMI with a target price of Rp 300 per share. Furthermore, within the transportation logistics sector, Samuel Sekuritas recommends a ‘buy’ for BULL, targeting a price of Rp 700.
Prasetya added that Samuel Sekuritas also recommends a ‘buy’ for INDF with a target price of Rp 7,900. Lastly, investors are advised to consider a ‘buy’ for SILO as a defensive strategy, with a target price of Rp 3,000.
Summary
Analysts have lowered their 2026 targets for the Jakarta Composite Index (IHSG) due to the persistent depreciation of the rupiah and rising global oil prices. Samuel Sekuritas reduced its year-end target to 7,500, citing an expected earnings growth of only 2%, while RHB Sekuritas Indonesia revised its forecast down to 8,100. These downward adjustments reflect growing concerns over external economic uncertainties, potential capital outflows, and pressures on corporate earnings across various sectors.
Despite the cautious outlook, experts suggest that current market conditions may create strategic entry points as valuations approach decade-lows. Analysts continue to favor specific sectors, including banking, consumer staples, and commodities, while recommending defensive positions for investors. Market participants are advised to monitor the rupiah’s stability and global interest rate trends, which remain critical factors that could significantly influence the trajectory of the IHSG throughout the remainder of 2026.