Stock Recommendation: Afrinvest Sees 26.4% Upside in Zenith Bank
Zenith Bank Plc has been rated buy by Investment firm, Afrinvest Limited in its latest stock recommendation. Analysts have set N41.70 target price for Zenith bank plc with 26.4% upside.
In the stock market, the share price of Ajose Adeogun based bank crossed N1 trillion again following rapid, huge volume from the buy side of the equities market.
The rally on the Nigerian Exchange supported growth in Zenith bank market valuation last week – following earnings beat in the first three months in 2024.
Zenith Bank Plc grew pretax profit by 269.7% year on year to N320.2 billion in Q1 2024 from N86.6 billion in Q1 2023 while net profit grew 291.4% year on year to N258.3 billion. Earnings per share was N8.23, a significant increase when compared with N0.82 posted in the comparable period in Q1-2023.
The Nigerian lender remains top players in the banking sector. Broadstreet analysts estimated the financial services group earnings would continue to rise given high interest rate environment.
Zenith Bank’s Q1 2024 unaudited financial report showed a significant 189.12% growth in its gross earnings. This was driven by a 154.9% year on year growth in Interest Income.
The surge in the bank’s interest income was driven due to improve appetite in credit creation at the time of hefty market rate.
Net loans and investment securities increased in the first quarter of 2024. In the same, Interest expense also grew strongly, up 157.0 year on year on the back of growth in customer deposits.
Overall, Net Interest Income grew 153.7% year on year. Due to better service delivery and improved activity, the bank’s net fee and commission income grew strongly, up 69.0% year.
The solid growth was due to significant increases in credit related fees, account maintenance fee, income from financial guarantees contracts issued, fees on electronic products, foreign withdrawal charges and commission on letters of credit.
Zenith Bank Plc grew pretax profit by 269.7% year on year to N320.2 billion in Q1 2024 from N86.6 billion in Q1 2023, while net profit grew 291.4% year on year to N258.3 billion. #Stock Recommendation: Afrinvest Sees 26.4% Upside in Zenith Bank
