Stocks on our Buy/Sell/Hold list are picked from the gainers and losers from the previous week. Here are our stock picks for this week’s trading session.
Diamond Bank: HOLD
Latest Results: First quarter results for the period ending March 2018 for the bank show that interest income dipped slightly to N38.13 billion recorded in the first quarter of March 2018, as against N38.65 billion for the corresponding period of 2017.
Profit before tax fell from N5.05 billion in 2017 to N1.25 billion in 2018. Profit after tax also dropped sharply from N4.29 billion in 2017 to N784 million in 2018.
Pricing
Current Share Price: N1.40
P.E Ratio: 2.54X
Price to Book Ratio: 0.14
YTD: -6.67%
One Year Return: 17.65%
Latest information
The bank, this week, announced the appointment of Oluseyi Bickersteth as an Independent Non-Executive Director. He was also unanimously appointed as Chairman. He replaces Professor Chris Ogbechie who has completed his tenure.
External View
Analysts at Afrinvest have placed a SELL recommendation on the stock. They have a target price of N1.24 per share which is 19% lower than the stock’s price of N1.53 as when the report was prepared.
Analysts at FBNQuest have placed an Underperform recommendation on the stock. They have a target price of N1.3 which is 8.9% below the stock’s price of N1.4 as at when the report was prepared.
Our View
Diamond Bank is a HOLD in Nairametrics’ opinion. Though the stock is trading close to its year low of N1.3, Q1 results were largely underperforming. We await Q2 results for more clarity.
Stanbic Ibtc: HOLD
Latest results: Q1 2018 results show that gross earnings increased from N47 billion in 2017 to N57 billion in 2018. Profit before tax moved from N18.6 billion in 2017 to N26.6 billion in 2018. Profit after tax increased from N16 billion in 2017 to N23 billion in 2018.
Pricing
Current Share Price: N52.05
PE Ratio: 9.86X
Price to Book Ratio: 2.72
YTD: 25.42%
One Year Return: 66.8%
Latest Information
The bank, in a notice to the Nigerian Stock Exchange last week, stated that subject to approval by the CBN, its audited HY 2018 results would be released to the market not later than 29th of August, 2018.
External View
Analysts at FBNQuest have a Neutral rating on the stock. They have a target price of N41.3 which is 20.7% below its current share price of N52 as at when the report was written.
Analysts at Afrinvest have a SELL rating on the stock. They have a one-year target price of N40.46 which is 17% lower than the N48.75 which the stock stood at as at when the report was prepared.
Our View
Stanbic Ibtc is a HOLD in our opinion. While the stock is trading at a year high, the company typically pays out a large interim dividend, which could give room for further upside.
Nestle Nigeria: SELL
Latest Results: First quarter results for the period ended March 2018 show that revenue increased from N61.1 billion in 2017 to N67.4 billion in 2018. Profit before tax dropped from N14.2 billion in 2017 to N13.6 billion in 2018. Profit after tax, however, inched up slightly from N8.3 billion in 2017 to N8.6 billion in 2018.
Pricing
Current Share Price: N1,500
PE Ratio: 35X
Price to Book Ratio: 22.4
YTD: -3.60%
One Year Return: 71.28%
External View
Analysts at Afrinvest have a SELL rating on the stock. They have a one-year target price of N1,236.32, which is 17.3% lower than the stock’s price of N1,495 when the report was prepared.
Analysts at FBNQuest have an underperform rating on the stock. They have a target price of N1,110.5 which is 29.5% lower than its price of N1,575 as at when the report was prepared.
Our view
Nestle is a SELL in Nairametrics’ view. The stock is currently trading at 1.4% below its year high of N1,615. There is limited room for upside at this point in time.
This is not a buy sell or hold recommendation. Remember to consult a competent financial analyst or stockbroker if you need help with your investment decisions.
