ARM Securities Upgrades GTCO Target Price after Earnings Beat
Investment analysts at ARM Securities Limited have raised the 12-month target price of GTCO Plc to N59.44 kobo following the financial services group’s earnings beat in the first half of 2024.
In recently released audited H1:2024 results, GTCO’s gross earnings jumped by 107.04% year on year to N1.39 trillion, mainly due to the spike in interest income and non-interest related income.
Specific details from the financial services warehouse revealed that interest income increased by +173.47% year on year to N617.89 billion. This significant surge was propelled by high interest rate environment that triggered loan asset repricing in line with changed in Nigeria’s monetary policy rate.
At the same time, the banking and finance services company recorded another massive year on year growth in non-interest income, up by 111.94% to N774.30 billion.
Analysts at ARM Securities Limited said this was an offshoot of the unrealized fair value gain on financial instruments on its foreign currency balance sheet. Elsewhere, operating expenses increased by 60.70% year on year to N201.80 billion due to higher personnel expenses and technology-related expenses in the period.
GTCO’s profit before tax (PBT) and profit after tax (PAT) grew massively by 206.59% and 222.86% year on year apiece to N1 trillion and N905.57 billion, respectively. Overall, analysts said net profit margin improved to 65.03% in the period from 41.70% in the comparable period in financial year 2023.
“We expect to see improvement in the Group’s interest income and non-interest income for the rest of the year riding on an elevated interest rate environment, consequently leading to robust profitability”, ARM Securities limited said in a review.
Analysts at the firm revised the target price for GTCo to N59.44 for 2024. At its current price of N46 as of September 13, 2024, this translates to an upside prospect of 29%, and then put a strong buy rating on the stock. #ARM Securities Upgrades GTCO Target Price after Earnings Beat CBN Defends Naira with $39m in Forex Market
