Stocks on our Buy/Sell/Hold list are picked from the gainers and losers of the prior week, as well as various analyst reports.
Diamond Bank: HOLD
Recent Results
Results for the third quarter ended September 30, 2018, show that gross earnings for the group dropped from N143 billion in 2017 to N142 billion. Profit before tax fell from N4.7 billion in 2017 to N3.08 billion. Profit after tax also dipped from N3.9 billion in 2017 to N1.6 billion.
Price Information
Current Share Price: N0.93
Price to Earnings Ratio: *None
Price to Book Ratio: 0.09
Year to Date Return: -38%
One Year Return: -39.22%
External View
Analysts at FBNQuest have a target price of N1 per share. This represents a potential upside of 53.3% from the stock’s price of N0.7 as at when the report was prepared.
Analysts at United Capital have a ‘Buy’ rating on the stock. They have a 12-month target price of N2.1 which represents a potential upside of 200% from the stock’s price of N0.70 as at when the report was prepared.
Our View
Diamond Bank is a HOLD in Nairametrics’ opinion. The stock has traded in a volatile manner in the last few months. Hitting a 5 year low of N0.65 before rebounding to its current level.
The price swings have been largely due to several rumours pertaining to the bank’s capital adequacy ratio and a purported bid by Access Bank to acquire it. All these have since been squashed, and the bank has obtained CBN approval to operate as a national bank.
Investors keen on taking positions would be better off waiting for a further decline, as well as the company’s FY 2018 results before doing so.
Seplat: HOLD
Recent Results
Results for the third quarter ended September 30, 2018 show that revenue jumped from N85.1 billion in 2017 to N173 billion in 2018.
Profit before tax stood at N65 billion in 2018 compared to a loss before tax of N650 million in 2017. Profit after tax stood at N27.9 billion in 2018 compared to a loss of N1.6 billion made in 2017.
Price Information
Current Share Price: N598.90
Price to Earnings Ratio: 2.61X
Price to Book Ratio: 0.61
Year to Date Return: 4.36%
One Year Return: 25.81%
External View
Analysts at United Capital have a ‘Buy’ rating on the stock. They have a 12-month target price of N867.7 which represents a potential upside of 47.2% from the stock’s price of N589.5 as at when the report was prepared.
Analysts at FBNQuest have an ‘Overperform’ rating on the stock. They have a target price of N971. This represents a potential upside of 64.7% from the stock’s price of N589.50 as at when the report was prepared.
Our View
Seplat is a HOLD in Nairametrics’ opinion. While the stock is trading cheaply at current levels, there remains room for further downside. The stock is currently trading close to its year low of N589.50, and could dip further if negative sentiments persist.
*Diamond Bank has no PE ratio because it made a loss in its FY 2017 results
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