JPMorgan Lifts IHSG Target to 8,600, Names Top Stock Picks
Key Takeaways
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JAKARTA, Investortrust.id — JPMorgan Indonesia has raised its year-end target for the Indonesia Composite Index (IHSG) to 8,600, up from a previous projection of 8,100, as strong domestic liquidity continues to drive a rally in the local stock market.
The firm noted that the IHSG has surged 27 percent over the past six months, reaching a record 8,125, outperforming the MSCI Asia ex-Japan index by five percentage points. Retail investors played a key role, contributing 50–52 percent of daily average transactions in July and August, the highest level since March 2022.
In contrast, foreign investors continued to post net outflows totaling $473 million in the current quarter. “We believe the underperformance of MXID reflects domestic uncertainty and weak earnings projections for 2025. However, this creates a low expectation base heading into the next six months of global monetary and fiscal easing,” JPMorgan analysts wrote in their recent note.
On the macroeconomic front, outlook for the next 6–12 months is seen improving. Bank Indonesia has cut its benchmark interest rate by 125 basis points this year, including a surprise 25-point cut in September. Liquidity conditions are expected to ease further with two additional 25-point cuts projected in October and November, alongside the redeployment of government funds in state-owned banks.
Although fiscal revenue fell 8 percent year-on-year in the first eight months of 2025, Finance Minister Purbaya Yudhi Sadewa has prepared five “quick win” programs to broaden the tax base and strengthen the fiscal position within the next two quarters.
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Valuations remain supportive. With the market trading at a forward price-to-earnings ratio of 12 times—1.5 standard deviations below the 10-year average—JPMorgan expects further rerating potential. For MXID, the bank set a bullish target of 7,000, assuming earnings per share growth of 5 percent from 2024 levels, in line with consensus estimates of 4–6 percent.
Sector and Stock Picks
JPMorgan upgraded the industrial sector to overweight, highlighting Astra International as a potential driver of total shareholder return. Energy was downgraded to underweight on expectations of softer coal supply, while consumer stocks remain a top pick, supported by government stimulus to boost household spending.
The research highlighted Bank Central Asia (BBCA), Sumber Alfaria Trijaya (AMRT), Indofood CBP (ICBP), Mitra Adiperkasa (MAPI), Indosat Ooredoo Hutchison (ISAT), and GoTo Gojek Tokopedia (GOTO) as attractive domestic plays with strong fundamentals. Interest-rate sensitive names such as Astra International (ASII), Ciputra Development (CTRA), Pakuwon Jati (PWON), and Aneka Tambang (ANTM), the latter serving as a proxy for gold exposure, were also deemed promising.