Adjusting stock market valuation

With the US government imposing reciprocal tariffs, valuations and forecasts for the stock market are also changing.

Be careful with market sentiment

VN-Index experienced 4 sessions of sharp decline in early April, losing 223 points in 4 sessions, pulling the index down from 1,317 points to its lowest point of 1,073 points. The market prices of hundreds of stocks plummeted. Immediately after that, from the session on April 10 until now, the market has recovered, but the current situation still makes analysts concerned. Some analysis groups have adjusted their market forecasts.

In its latest update, Phu Hung Securities (PHS) mentioned the Smoot-Hawley Tariff Act of 1930 and hoped that this situation would not be repeated. However, caution is still required at this time.

Vietnam’s stock market has reacted positively and regained confidence after the news that the US reduced reciprocal tariffs and delayed implementation for 90 days. Concerns have temporarily subsided, but a cautious stance remains, especially in the context of China being imposed high tariffs and the sharp depreciation of the yuan.

In terms of internal factors, PHS assessed that the growth in the first quarter of 2025 recorded positive momentum in most areas, with GDP increasing by 6.93% - a very high level ever recorded in the first quarter. However, compared to the target of 8% in 2025, Vietnam still needs to promote domestic growth drivers more strongly in the rest of the year.

In the stock market, the increase was mainly driven by the net buying power of domestic individual investors, with the key sector being real estate. However, as uncertainty persists, the VN-Index will continue to correct, so PHS has reduced its 2025 index forecast with the prospect of the entire market's profit falling to 8-15% compared to the previous forecast of 17-18%.

Specifically, in PHS's positive scenario, VN-Index is expected to return to the 1,200 - 1,250 point range, possibly trading around 1,080 - 1,180 points in the base scenario and does not rule out the possibility of VN-Index reaching 900 - 930 points, corresponding to P/E and P/B of 9.x and 1.2x respectively in the worst scenario.

However, this securities company also emphasized that not all industries are directly and heavily affected by tariffs. History shows that the above P/E and P/B levels will often witness buying power again because in fact, Vietnam's growth prospects are still better than the global average. In addition, at the current discount level, many defensive stocks with high cash dividends are showing very attractive dividend yields, so the current price range is quite suitable for long-term investment purchases.

Meanwhile, KBSV Securities has also adjusted down its 2025 growth forecast after considering the impact of the US's reciprocal tax policy.

“We assess that the risks of tariff policies may impact the Vietnamese economy in the long term. However, the negative impacts on the stock market may be balanced by the end of the second quarter of 2025,” KBSV assessed.

From the forecast of 16% profit growth of enterprises on the HSX in 2025, KBSV has lowered the forecast to 5%. KBSV expects that the VN-Index will reach 1,100 points, the P/E valuation of the VN-Index will decrease to 11.9 times, compared to the end of 2024 at 14.6 times (lower than the average of the last 10 years at 16.6 times).

Looking forward to more optimistic scenarios

Caution is the general reaction of analysts and investors in the current context. However, more optimistic assessments also appear.

Although Mr. Trump's tariff policy may have many impacts on the macro outlook, investment environment, interest rates, foreign capital flows, as well as domestic investor sentiment, Vietnamese stocks still have positive internal factors that help the market have the opportunity to experience alternating recovery phases.

Despite the impact of tariffs, major securities firms remain optimistic about the market on the basis that Vietnam's domestic growth remains strong.

Among them, we can mention the introduction of the KRX trading system in early May and the market upgrade in September, as well as the boosted public investment, policies to remove difficulties for real estate businesses, policies to stimulate consumption, and interest rates remaining low...

On the general level, forecasts from VNDirect Securities Company are more positive, although the targets have been adjusted downward.

In early 2025, VNDirect proposed two scenarios for the stock market in 2025. Accordingly, in the most positive scenario, VN-Index is forecast to increase by 32%, bringing VN-Index to 1,670 points. This forecast is the highest compared to other securities companies. In the negative scenario, VN-Index still increases, but only by 6%, equivalent to 1,340 points.

After the US announced reciprocal tariffs, VNDirect adjusted its valuation, but still expected that overall market profits would continue to improve, despite the challenges from tariffs. Positive prospects from the banking and residential real estate sectors (two sectors that account for nearly 70% of market profits) will be the main driving forces.

This securities company gives 3 scenarios for VN-Index in 2025.

Accordingly, in the positive scenario, with a reciprocal tax rate below 20%, the US Federal Reserve (Fed) cutting interest rates 4-5 times, the market being announced to be upgraded in September and EPS growth at 16-17%, target P/E of about 13.4 times, the index will increase by 20% and close at 1,520 points.

The neutral scenario is built in the assumption of a reciprocal tax in the range of 20-30%, the Fed cuts interest rates 2-3 times, the market is upgraded, EPS growth is 14% and P/E is 12.3 times, then the market will increase by 10%, the index will close at 1,400 points.

VNDirect's most negative scenario is that the index falls 3% and closes at 1,230 points when the corresponding tax is in the range of 30-46%, the Fed cuts interest rates less than 2 times, the market is not upgraded, EPS increases 12% and the target P/E is 11 times.

In fact, despite the impact of tariffs, major securities companies still have high expectations for the market based on the fact that Vietnam's domestic growth remains strong, from the reorganization of the political system, to the development of the private economy and positive signals towards upgrading the stock market...

Source: https://baodautu.vn/dieu-chinh-dinh-gia-thi-truong-chung-khoan-d268404.html