Fidelity Bank Target Price Raised by 32% with Buy Rating

Fidelity Bank Target Price Raised by 32% with Buy Rating

Fidelity Bank Plc’s 12-month target price has been increased by more than 32% by investment firm CardinalStone Securities Limited, according to its equity research report.

The bank trades at N19 per share on the Nigerian Exchange (NGX) with a total market capitalisation of N954 billion.

The target price was revised to N24.99 from N18.91, implying an exit price to book multiple of 0.9x, according to CardinalStone Securities Limited, a discount to Europe, Middle East and Africa (EMEA) peer average of 1.2x.

The price surge was anchored on the expectation that Fidelity Bank Plc loan growth traction will boost the financial institution’s earnings in 2026.

Analysts anticipate a N1.50 dividend payment for 2025 following a sharp interest earnings asset growth at the end of 9 months and hope to see N2 dividend payment in 2026.

“We expect Fidelity Bank to pay out 24.2% of its earnings as dividends, supported by the expected N259.0 billion capital inflow from its ongoing private placement, which should lift its 15.0% capital adequacy ratio,” CardinalStone said in the report.

In the 9m-2025 financial period, the investment firm said Fidelity Bank aggressively expanded its interest earnings asset by N1.2 trillion, surpassing its pre-2023 historical accumulation average of N344.3 billion by 3.4x with an emphasis on expanding total loans to customers and banks.

“We expect this expanded asset base and further investments in Q4 to underpin a strong finish to the year and a solid stepping stone for 2026, despite headwinds from moderating fixed-income yields,” CardinalStone said in its report.

Fidelity Bank after tax profit is projected to print at N310.6 billion in 2025 amidst tight operational and regulatory environment. For 2026, CardinalStone Securities Limited estimated that the bank’s net income will print at N363.3 billion.

The investment firm expects Fidelity Bank to distribute 24.2% of the profit after tax for the year to shareholders, supported by the expected N259.0 billion capital inflow from its ongoing private placement.

“We maintain a BUY recommendation on the counter, with the revised target price suggesting a 31.5% potential upside from the reference price of N19.00”, the firm said.

However, we highlight the potential risk of earnings dilution from the additional shares issued via the ongoing private placement capital raise. VFD Closes Strong as Investors Confidence Surges, Defies Rights Issue Pressure