AAG Capital Sets N141.62 Target Price for GTCO Ahead of Q2
Securities and Exchange Commission-regulated (SEC) AAG Capital Limited has set N141.62 per share as the target price for Guaranty Trust Holding Company (GTCO), according to details from the investment firm’s equity review.
The investment firm sets a lower target price following a sharp year-on-year reduction in GTCO earnings per share (EPS), which was 25% lower at N5.89 in Q1 2026, down from N7.83 in the equivalent period in 2025.
The market anticipates that the second-quarter (Q2) 2026 earnings will be a fundamental driver of the next re-rating of the financial company’s share price. Thought sentiment, which has remained positive, has always influenced GTCO’s price movement.
Details from the Nigerian Exchange (NGX) showed GTCO’s share price closed at N145 at the close of the trading session on Friday, down from N146.80 at the beginning of the previous week.
This suggests that, to AAG Capital Limited, GTCO is overvalued at the current market price, a bearish sentiment towards the financial stock in the local bourse.
Equity analysts confirmed GTCO’s resilient performance in Q1 2026, supported by solid growth across its core interest income and fee-generating businesses, reflecting the continued strength of its banking franchise.
The firm highlighted a decline in the financial services group’s profitability, attributed to a significantly higher tax burden and weaker other income performance.
In spite of its lower profitability, a sharp contrast to GTCO’s historical precedent, AAG Capital said underlying earnings quality and balance sheet strength remained fundamentally robust.
In Q1, GTCO gross earnings advanced 9.19% year on year to ₦571.4 billion, driven largely by a 17.52% increase in interest income to ₦467.0 billion, analysts said.
AGG Capital commented that the performance reflects improved yields across customer lending, investment securities, and treasury placements.
While funding costs remained elevated, with interest expense rising 39.75% year on year to ₦110.7 billion amid deposit repricing pressures, the Group continued to optimise its liability structure as borrowings declined sharply to ₦16.5 billion from ₦82.2 billion at FY 2025.
Consequently, net interest income expanded 11.98% year on year to ₦356.3 billion, underscoring GTCO’s resilient core earnings capacity despite a tighter funding environment.
Analysts said the Group also continued to deepen its non-interest income streams. Fee and commission income advanced 7.09% to N80.3 billion, a more modest growth rate relative to recent periods but underpinned by structural strength in digital channels.
E-business income was a standout, surging 68.63% to N21.9 billion, while credit-related fees grew 54.00% to N16.7 billion, and account maintenance charges rose 42.15% to N15.1 billion.
AAG Capital stated that these trends affirm the continued monetisation of GTCO’s digital infrastructure and the broadening depth of customer engagement across its transaction banking platform.
GTCO trading income remained healthy, equity analysts said in the report, with gains on financial instruments increasing 26.88% y/y to ₦25.7 billion, which was partly offset by weaker other operating income performance relative to the prior year.
On a positive note, total impairment charges moderated significantly by 40.01% y/y to ₦8.1bn, indicating easing credit risk pressures and better loan performance compared with Q1 2025.
The report hints that cost pressures, however, remained the principal drag on profitability during the quarter. GTCO’s operating expenses trended upward across key cost lines, particularly personnel expenses, depreciation charges, and administrative costs, reflecting persistent inflationary conditions, technology investments, and expansion-related spending.
As a result, profit before tax rose marginally by 0.88% y/y to ₦302.9 billion, while profit after tax declined 15.42% year on year to ₦218.1 billion due largely to a significantly higher effective tax burden. Earnings per share correspondingly softened to ₦5.89 from ₦7.83 recorded in Q1 2025.
