Zenith Bank Rallies as Investors Chase Upside Potential
Zenith Bank Plc climbed by approximately 5% to N114.95 in the stock market as investors’ sentiment on banking names improved despite market-wide losses.
The bank is still trading at a significant discount to its 52-week high of N136.90, even after its share price surged amid sell pressure on the local bourse.
Bargain hunting lifted the market value of Zenith Bank upward by about 5% week on week to N114.95 at the close of trading on Friday.
The bank traded against the broader market downturn amid upward target price adjustments by equity analysts following the first quarter 2026 earnings release.
In its equity report, CardinalStone Securities Limited priced in Zenith Bank’s stronger earnings quality driven by funding mix optimisation, infrastructure upgrades, and a clear growth strategy.
The investment firm said last month that the bank’s 20.0% loan growth guidance for FY’26 indicates a potential rebound from FY’25 traction, which was biased by forbearance-related write-offs that masked the underlying core lending momentum.
After Q1 earnings performance, CardinalStone Securities Limited upgraded Zenith Bank’s target price to N151.80 from N105.98, a significant upside to the current price.
Recent partial rotation from sovereigns to loans in Q1’26 reinforces this outlook, analysts said, adding that reduced reliance on expensive funding supports its upward revision in net interest margin and stronger core earnings.
CardinalStone Securities told investors in the report that, beyond lending, recent technology investments have begun to translate into stronger fee income, as enhanced capabilities across digital banking channels continue to drive higher transaction volumes and provide a more stable base for Non-Interest Revenue (NIR).
Zenith Bank completed an overhaul of its core banking system in the last lap of 2024, utilising N56.9 billion from its 2024 hybrid offer (rights issue & public offer).
The new system has since improved system stability and processing capacity, enabling the bank to handle higher transaction volumes and generate higher fee income.
Analysts said this impact is reflected in the strong growth in net fees and commission income, which rose by 41.1% year on year in the financial year 2025 and 44.6% year on year in Q1 2026, driven largely by mobile and digital banking activities.
“For FY’26, we project a more moderate 13.0% YoY growth in net fees and commission income, reflecting an expected base effect-induced slowdown in momentum, particularly “
“Nonetheless, the growing contribution of scalable and recurring fee income should provide a steady buffer to earnings, partly offsetting trading losses in a strengthening Naira environment”
CardinalStone Securities said over the medium term, analysts expect this income line to play a more prominent role, contributing an average of 7.9% of gross earnings over the next five years, compared to about 6.0% over the last three years Nigeria’s Top Big Banks Value Shrinks 14% to N14trn or $10.3bn
