Access Plc: Analysts See 40% Upside, Set Target Price
Nigeria’s top banking group, Access Holdings Plc, is trading with an eye-catching discount to its price target. In a note, Cowry Asset Limited set the top lender target price at N26.60.
In its note, the investment company revealed its expectation of 40% upside potential in Access Plc based on the target price it set at a reference price of N18.95. Last week, the financial services group stock market price rose slightly to N18.95 from N18.80.
The positive price movement lifted the financial services holdings company’s market valuation to about N674 billion in the stock market. Access Plc controls 17% of Nigerian banking assets, according to Fitch Ratings, a leverage some analysts have used to predict a bumper earnings performance for 2024.
In its stock recommendation, analysts forecasted that Access Holdings Plc earnings per share (EPS) would grow to N6.09 in 2024 from N4.35. Due to expectation of an improved margin associated with high interest rate environment, analysts expect the group to benefit from size advantage to boost earnings performance in the second quarter of 2024.
In the first quarter of 2024, Access Holdings Plc benefited strongly from Central Bank of Nigeria (CBN) monetary policy tightening, and this is reflected in some strong earnings forecasts.
Improvement in monetary policy rates could be beneficial for margin expansion, CardinalStone Securities also said in an equity report on the group. Access Holdings Plc.’s net interest income grew by 189.4% year on year to N275.7 billion in the first three months in the year. Also, the group’s net interest margin then climbed 30 basis points to 6.4%.
Analysts said these increases highlighted the accretive benefit of the higher interest rate environment on the bank’ topline, with interest income contributing the bulk or 75.8%, of gross earnings.
CardinalStone Securities Limited also estimated that Access Holdings will record the highest interest income print among tier-1 peers, a testament to the group’s about N17 trillion of interest-earning assets. #Access Plc: Analysts See 40% Upside, Set Target Price Transcorp Hotels Rises by 9% to N1.007 Trillion
