Access Holdings: Analysts See Upside Potential, Cite Earnings Catalysts
Equities analysts have projected strong upside potential for investors with interest in Access Holdings Plc, citing key earnings catalysts like its investment in IT infrastructure, new financial products, its latest trade finance launch, and dividend payments record.
Though estimated upside expectations differ, analysts’ consensus remained that the financial holdings service is currently under priced in the equities market relative to its peers in the Tier-1 class.
Traded as N22, the market valued the financial services holdings company with a strong cross-border footprint at about N1.2 trillion, trading details from the Nigerian Exchange revealed.
In their respective equity research notes, some analysts said Access Holdings Plc is valued like a bank, not as a conglomerate with a series of cash-generating units contributing significantly to the overall growth.
In its stock recommendation for the week, equities analysts at Apel Securities Limited projected about 44% upside potential on investment in Access Plc’s shares.
The upside expectation, though strong to attract buying interest, is still way low compared with CardinalStone Securities’ 63% possible price appreciation. Apel Securities Limited, guiding investors to buy Ticker: ACCESSCORP at N22 reference price, set its fair value at N31.67.
Data from the Nigerian Exchange showed that Access Holdings’ share price steadied at N22, with analysts estimating N31.67 as the stock’s fair value. In a note, CardinalStone Securities expressed optimism on Access Plc’s net interest margin growth prospects.
This is expected to be driven by net fee & commission income, which should benefit from improved digital core banking platform capabilities following the latest round of investment in IT infrastructure.
Analysts also noted the banking group’s growing presence across international markets with the expectation of high-level traction from trade finance services to support fee & commission income.
“We highlight that the bank’s penetration into international trade flows covers remittances and cross-border payments”, CardinalStone Securities Limited said in a note following Q1 earnings release.
The investment analysts stated that they see scope for synergy-driven value creation that would be particularly supportive for net interest margin growth, led by asset management and insurance cross-selling.
CardinalStone highlighted that the merger that formed Access ARM Pension, with assets under management of N3.3 trillion and 2.1 million retirement savings accounts, positions the group to deepen cross-selling opportunities and scale non-interest revenue.
Analysts estimated a 15.3% increase in non-interest revenue to N1.5 trillion in financial year 2025 from N1.3 trillion in 2024.
Recently, Access Bank made a strategic step to commence trade finance activities with designated counterparties in Morocco and Egypt, leveraging the strategic presence of Access UK and Access Paris.
This footprint is expected to expand further with the upcoming launch of Access Malta, which will serve as an additional hub to deepen cross-border trade flows and enhance the bank’s pan-African trade finance capabilities.
CardinalStone analysts put 12-month target for Access Holdings at N35.84, translating to a potential 63.3% upside compared to a reference price of N21.95.
As the bank evolves through the stages of its strategic cycle, analysts said they expect that asset turnover will maintain an upward trajectory as the management begins to properly and efficiently sweat the new acquisitions.
Analysts at CardinalStone Limited highlighted its interim dividend of N1/share, up from N0.45/share in the first half of 2024, as a potential catalyst for the share price surge. In a strategic step for the East African banking market, Access Bank Plc has formally completed its acquisition of National Bank of Kenya (NBK) from KCB Group, which commenced in March 2024.
Following the completion of the transaction, NBK is now a wholly owned subsidiary of Access Bank Plc, strengthening the Nigerian bank’s foothold in Kenya. For the time being, NBK and Access Bank Kenya will function independently, pending the integration of operations and systems. South African Rand Weakened Against Dollar
