Buy/Sell/Hold, Guaranty Trust Bank, Nigeria Stock Excahnge

Stocks to Buy/Sell/Hold are drawn from the top gainers and losers of the previous week, as well as various analysts’ reports. 

 Dangote Sugar: HOLD  

Recent ResultsResults for the first quarter ended March 2019, show that revenue fell from N41.1 billion in 2018 to N38.1 billion in 2019. Profit before tax however rose from N8.3 billion in 2018 to N10.7 billion in 2019. Profit after tax also increased from N5.2 billion in 2018 to N7 billion in 2019. 

Price Information  

Current Share Price: N10.6  

Price to Earnings Ratio5.32X 

Price to Book Ratio: 1.19  

Year to Date: -30.49%  

One Year Return: -25.34% 

External View  

Analysts at United Capital have a Hold’ recommendation. They have a 12 month target price of N16.80. This represents a potential upside of 49.3% from the stock’s price of N11.3 as at when the report was prepared.  

Analysts at FBNQuest have a Neutral rating on the stock. They have a one year target price of N14.90. This represents a potential upside of 33.1% from the stock’s price of N11.20, as at when the report was prepared.  

Our View  

Dangote Sugar Refinery is a HOLD in Nairametrics’ opinion. Though the stock is trading quite cheaply, the year to date decline is not sufficient to warrant entry.  

 Nestle Nigeria: HOLD  

Recent ResultsResults for the first quarter ended March 2019, show that revenue increased from N67.4 billion in 2018 to N70 billion in 2019. Profit before tax jumped from N13.6 billion in 2018 to N19.1 billion in 2019. Profit after tax also increased from N8.6 billion in 2018 to N12.8 billion in 2019.  

Price Information  

Current Share Price: N1300  

Price to Earnings Ratio: 21.81X 

Price to Book Ratio: 16.3  

Year to Date: -12.46%  

One Year Return: -6.77%  

External View 

Analysts at FBNQuest have a neutral recommendation on Nestle. They have a target price of N1431. This represents a potential upside of 14.5% from the stock’s price of N1250, as at when the report was prepared.

Analysts at United Capital have a Buy recommendation on the stock. They have a 12month target price of N1636.10. This represents a potential upside of 30.9% from the stock’s price of N1250, when the report was prepared.  

Our View 

Nestle Nigeria is a HOLD in Nairametrics opinion. While the stock is trading at a PE ratio nearly 4 times the average PE ratio on the exchange, such premiums are not uncommon with blue chip stocks. The thin liquidity also means that a significant price decline may take a while.  

Deal book 300 x 250

 FCMB Group: HOLD  

Recent ResultsResults for the first quarter ended March 2019, show that revenue increased from N42.1 billion in 2018 to N43.9 billion in 2019. Profit before tax increased from N3.2 billion in 2018 to N4.2 billion in 2019. Profit after tax also increased from N2.5 billion in 2018 to N3.6 billion in 2019.  

Price information  

Current Share Price: N1.73  

Price to Earnings Ratio2.16X

Price to Book Ratio: 0.18 

Year to Date: -8.47%  

One Year Return: 3.59%  

External View 

Analysts at FBNQuest have a Neutral recommendation on the stock. They have a target price of N2.80, which represents a potential upside of 72.8% from the stock’s price of N1.6 as at when the report was prepared.  

Analysts at United Capital have a Buy recommendation on the stock. They have a target price of N2.50, which represents a potential upside of 56.3% from the stock’s price of N1.6 as at when the report was prepared.  

Our View  

FCMB is a HOLD in Nairametrics’ opinion, even though the stock is trading at a price earnings ratio lower than its peersSterling Bank which is trading at 6.9 times earnings and Fidelity Bank which is trading at 1.9 times earnings.  

The stock has not declined sufficiently year to date, to an attractive entry point.  

 Okomu Oil Palm: SELL 

Recent ResultsResults for the first quarter ended March 2019, show that turnover fell sharply from N7.3 billion in 2018 to N4.2 billion in 2019. Profit before tax fell from N3.9 billion in 2018 to N1.2 billion in 2019. Profit after tax also declined from N3.4 billion in 2018 to N1 billion in 2019.  

Price Information 

Current Share Price: N55.80 

Price to Earnings Ratio: 8.82X 

Price to Book Ratio: 1.8  

Year to Date: -26.77%  

One Year Return: -30.05%  

External View 

Analysts at FBNQuest have a Neutral recommendation on the stock. They have a target price of N64.7, which represents a potential upside of 16.1% from the stock’s price of N55.8, as at when the report was prepared.  

Analysts at United Capital have a Buy recommendation on the stock. They have a 12 month target price of N92.1, which represents a potential upside of 65.1% from the stock’s price of N55.8 as at when the report was prepared.  

Our View  

Okomu is a SELL in Nairametrics’ opinion. While the decline in performance is also present in Presco Plc its peer, Okomu’s numbers may come in significantly lower. Investors with a long term view, may decide to HOLD, or renter after its H1 2019 results are released. 

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