UBA: Analysts Upgrade Earnings, Price Expectations Ahead of Q2
Fuel by optimism, a growing number of Broadstreet equities analysts have upgraded earnings, price expectations for UBA Plc ahead of second quarter results.
The upswing in its forecasted earnings boosted investors’ appetite in the equities market, driving UBA Plc market value to about N1.5 trillion on Friday.
A slew of analysts formed consensus that the group earnings would continue to growth, supported by its Pan African market footprints and sustained capital investment in banking assets.
Hoping for a final dividend of N5.10 in 2025, Cordros Securities Limited set higher price target of N58.28/s for UBA, upgraded from N57.42/s and maintain buy rating.
In the equities market, UBA share price settled at N36.15 on Friday, which suggests a significant upside potential from estimated target price for the stock.
Equities analysts at Afrinvest are expecting 47.5% upside from estimated target price of N53.09 per share of UBA at reference market price of N36.
UBA delivered an impressive earnings performance in the first quarter of 2025. With a strong start to the year, reflecting UBA’s sustained investment in electronic banking, analysts have forecasted a strong spike in revenue for the year.
CardinalStone Securities Limited said UBA remains focused on strengthening its regional footprint and digital capabilities, supported by the imminent deployment of its capital raise proceeds.
The bank plans to launch a Saudi Arabian subsidiary and anticipates regulatory approval for its France operations this year, reinforcing its international expansion drive.
“We now expect a 23.0% increase in pre-tax profit to N988.8 billion”, CardinalStone Securities Limited said in a report. Analysts said the expected surge in pre-tax profit will be driven by the projected increases in net-interest income and non-interest revenue.
In Q1-25, UBA recorded a 37.3% year on year growth in gross earnings driven by growth across both core and non-core income.
Analysts at Cordros Securities Limited revised gross earnings forecast upward by +26.7% from +23.4% previously set on expectation of a better performance across core and non-core banking operations.
“We reiterate our positive view on the group’s Non-Interest Income (NII) profile, given the strong contribution of sustainable income lines such as fees and commission income”, Cordros Securities Limited said in its review.
The investment firm anticipate as strong spike in core income growth in 2025 on the back of an elevated interest rates, supported by analysts’ projections of a 28.2% growth in earning assets.
UBA earnings is expected to remain solid due to the group’s diversified operations even with potential rate cuts during the year.
“We believe UBA’s international operations will continue to provide support for sustained top line growth”, Cordros Securities Limited said in a note.
With decline in loans forbearance which printed at 5%, according to details obtained from the group’s audited report for 2024, analysts hope to see lower provision in 2025.
UBA has continued to boost asset quality since 2023 when it provisioning peaked at 20%
“We expect a moderation in provisioning, resulting in a lower cost of risk of 3.0%, down from 3.2%. Non-interest income should also expand, driven by a 26.7% increase in net fees and commission”, Cordros Securities Limited highlighted.
Analysts projected UBA operating income and operating expenses to grow by 25.3% and 14.8%, respectively, translating to an improved cost-to-income ratio of 51.1% in 2025 –down from 55.7% in 2024.
The group pre-tax profit is expected to grow by 39.1%. Overall, EPS is projected to grow modestly by 0.3% to N21.80, reflecting the impact of 6.84 billion additional shares.
Operating income is projected to grow faster, stemmed from the contribution from net fees and commission income and gains on investment securities amid a marginal decline in its ‘other operating expenses’ line. Analysts said they expect this to be positive for the group, supporting overall profitability growth. #UBA: Analysts Upgrade Earnings, Price Expectations Ahead of Q2#
