Stocks to watch are picked from the top gainers and losers of the previous week, as well as various analyst reports.

Fidelity Bank: HOLD 

Recent results 

Results for the third quarter ended September 30, 2018 shows gross earnings increased from N130 billion in 2017 to N139 billion in 2018. Profit before tax also rose from N16.2 billion in 2017 to N20 billion in 2018. Profit after tax also rose from N14.4 billion in 2017 to N17.8 billion in 2018.

Price Information 

Current Share: N2.05
Price to Earnings ratio: 2.87X
Price to Book ratio: 0.33
Year to date return: 8.4%
One year return: -35.73%

External View 

Analysts at FBNQuest have a neutral rating on the stock. They have a target price of N2.9 which represents a potential upside of 14.7% from the stock’s price of N2.5 as at when the report was prepared.

Analysts at United Capital have a Buy rating on the stock. They have a one-year target price of N2.8 which represents a potential upside of 12% from the stock’s price of  N2.5 as at when the report was prepared.

Our View 

Fidelity Bank is a HOLD in Nairametrics’ opinion. The stock is trading at a PE ratio inline with its peers. Sterling Bank is trading at a PE ratio of 6.29 earnings. FCMB is trading at a PE ratio of 2.558 times earnings.

Seplat: HOLD

Recent results

Results for the nine months ended September 30, 2018, shows revenue rose from N85.1 billion in 2017 to N173 billion in 2018. Profit before tax stood at N65 billion in 2018 as against a N760 million loss in 2017. Profit after tax also stood at N27.9 billion as against a N1.6 billion loss in 2017.

Price Information 

Current Share Price: N535
Price to Earnings ratio: 2.35X
Price to Book ratio: 0.55
Year to date return: -16.4%
One year return: -17.76%

FCMB ads 300 x 250

External View

Analysts at FBNQuest have an Overperform rating on the stock. They have a target price of N1078, which represents a potential upside of 99.6% from the stock’s price of N540.

Analysts at United Capital have a Buy rating on the stock. They have a 12-month target price of N876, which represents a potential upside of 62% from the stock’s price of N540 as at when the report was prepared.

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Our View 

Seplat is a HOLD in Nairametrics’ opinion. The stock is trading at a PE ratio far below stocks in that sector. Total is trading at a PE ratio of 7.79 times earnings. Forte Oil is trading at a PE ratio of 12 times earnings.

The company is due to release its results within the current month, and investors would be better off waiting till then. Preferably after its marked down for a dividend payment.

Access Bank: HOLD 

Recent results

Results for the third quarter ended September 30, 2018, shows The Gross Earnings for the 9- months increased from N365.1bn recorded during the corresponding period in 2017 to N375.2bn in 2018.

Profit Before Tax dropped from N72 billion for the period in 2017 to N70.3 billion in 2018. Profit After Tax, however, increased from N56.4bn, which was recorded during the same period in 2017 to N62.9bn for the third quarter of this year.

Price Information  

Current Share Price: N5.75 

Price to Earnings ratio: 2.39X 

Price to Book ratio: 0.35 

Year to date return: -16.4% 

One year return: -51.68% 

 External View 

Analysts at FBN Quest have an Overperform rating on the stock. They have a target price of N11.2, which represents a potential upside of 72%, from the stock’s price of N6.5 as at when the report was prepared.

Analysts at United Capital have a Hold recommendation on the stock. They have a target price of N7.1, which represents a potential upside of 9.2%, from the stock’s price of N6.5 as at when the report was prepared.

Our View 

Nairametrics retains its sell recommendation on Access Bank, despite the bank’s decision to scrap a N75 billion rights issue.

Investors would be better off entering the stock after the enlarged entity has released a combined result. Rating agency Moody’s this week gave an indication, it would downgrade the stock, after its merger with Diamond Bank.


Disclaimer

Please consult a financial adviser before making an investment decision.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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