Stocks on Nairametrics’ Buy/Sell/Hold are drawn from various analysts’ reports, as well as the top gainers and losers of the prior week.
Guinness Nigeria: SELL
Recent results: Results for the Q3 period ended April 31st, 2019 reveal that revenue dropped from N105 billion in 2018 to N101 billion in 2019. Profit before tax fell from N7.8 billion in 2018 to N6.2 billion in 2019. Profit after tax also dropped from N5 billion in 2018 to N4.2 billion in 2019.
Price Information
- Current Share Price: N49.05
- Price to Earnings Ratio: 16.43X
- Price to Book ratio: 1.2
- Year to Date Return: -31. 9%
- One Year Return: -51.83%
External View: Analysts at United Capital have a ‘Buy’ recommendation on the stock. They have a twelve-month target price of N74.70, which represents a potential upside of 45% from the stock’s price of N51.50, as at when the report was prepared.
Analysts at FBN Quest have an ‘Underperform’ rating on the stock. They have a target price of N60.30, which represents a potential upside of 17.1%, from the stock’s price of N51.50, as at when the report was released.
Our View
Guinness Nigeria Plc is a SELL in Nairametrics’ opinion, even though the stock is trading at multiyear lows and at a PE ratio lower than Nigerian Breweries Plc. The fundamentals of the brewery industry are generally quite poor.
Competition between the big three firms (Guinness Nigeria, International Breweries, and Nigerian Breweries) is intense. In the event of the scheduled increase in excise duties taking place, the companies would face even more pressure, as consumer demand remains weak.
Guinness Nigeria‘s Q3 2018/2019 results also show a marked year on year decline.
Beta Glass: HOLD
Recent results: Result for the first quarter period ended March 2019 shows that revenue increased from N6.4 billion in 2018 to N7.1 billion in 2019. Profit before tax rose from N1.6 billion in 2018 to N1.8 billion in 2019. Profit after tax also rose from N1.1 billion in 2018 to N1.2 billion in 2019.
Price Information
- Price to Earnings ratio: 6.37X
- Price to Book ratio: 1.22
- One year return: -16.11%
- Year to date return: 0.95%
External View: None
Our View: Beta Glass Plc is a HOLD in Nairametrics‘ opinion. The stock has outperformed the NSE All-Share Index which is down 9.52% year to date. Q1 2019 results have also shown a slight improvement year on year, at a period when many companies experienced a slowdown due to the general elections.
Stanbic IBTC Holdings: HOLD
Recent results: Result for the first quarter ended March 2019, shows that gross earnings increased from N57.3 billion in 2018 to N58.6 billion in 2019. Profit before tax, however, dipped from N26.6 billion in 2018 to N23.5 billion in 2019. Profit after tax also dropped from N23 billion in 2018 to N19.1 billion in 2019.
Price Information
- Current Share Price: N44.05
- Price to Earnings Ratio: 6.6X
- Price to Book Ratio: 1.74
- Year to Date Return: -8.13%
- One Year Return: -5.19%
External View: Analysts at United Capital have a ‘Buy’ recommendation on the stock. They have a target price of N53.70, which represents a potential upside of 16/7% from the stock’s price of N46, as at when the report was prepared.
Analysts at FBN Quest have a ‘Neutral’ rating on the stock. They have a target price of N49.80, which represents a potential upside of 8.2% from the stock’s price of N46 as at when the report was prepared.
Our View: Stanbic IBTC is a HOLD in Nairametrics’ opinion. While Q1 2019 results show a slight decline, the stock has not declined significantly year to date to warrant an entry.
Investors would be better off waiting for second quarter 2019 results before deciding to take or exit a position.
Disclaimer
Please consult a financial adviser before making an investment decision.
