FBN Holdings gets a valuation boost as investors key into earnings prospects for the financial year 2021 amidst a tough operating environment and unfavourable developments in the financial markets.
One of the top Nigerian lenders has seen a meteoric jump in stock market valuation in the last 30-days, nearing N422 billion. On Monday, equity analysts at Afrinvest Limited had issued a sell alert on the stock. >>Afrinvest Issues Buy Alert on FMN Plc, Ecobank Shares
Regrettably, the alert, if followed could have hurt investors, shareholders that stick to the advice as Tier 1 bank outperformed key market indicators following increased investors interest.
In an equity report, CSL Stockbrokers Limited had set a target price at N12.13 before it could possibly issue a sell alert. In a surprise turn of an event, after falling below N7.85 at the beginning of the year to N7.30, a fresh rally in the local bourse has to a greater extent favoured FBNH stock re-rating.
FBNH share price continues to maintaining an uptrend, according to stock market data screened by MarketForces Africa and far ahead of equity analysts’ projections. The bank share price hits N11.75 afternoon, though it shed 50 kobo from the mid-day result seen by MarketForces Africa analysts.
Tracking its data on the Nigerian Exchange mid-day report, FBNH share price has always been relatively stable, and lack such trajectory seen in recent times.
Analysts said expectations of the next big thing could be sending a strong buy signal as investors have continued to pump fresh money into the financial service stock amidst a seesaw movement in the Nigerian Exchange.
FBNH share price closed at N10.95 from N7.50 on 14-September, 2021. Equity analysts polled by MarketForces Africa express views investors are taking a position in the company because of the expectation of improving dividends, saying the stock is probably on a big-time re-rating to match peers level.
Elsewhere, MarketForces Africa gathered from Broadstreet experts that positive sentiment on the holdings earnings performance and neutralisation of leadership threats appears to be driving investors’ large bets on the ticker.
With 35.895 billion shares outstanding, FBN Holdings now commands about N424 billion, to correctly position the brand among its peers in the Tier 1 space in terms of valuation.
The last board reshuffle caused by the group leadership fiasco has settled dust on what some investors see as a key risk at FBNH”, a stockbroker who prefers not to be mentioned told MarketForces Africa at noon.
FBNH Plc.’s pre-tax profit was down 9.2% year on year while net profit from continued operations was up 6.9% year on year at the second-quarter earnings season. However, a loss of N44 million reported from discontinued operations in the first half of 2021 compared with a profit of N13.8 billion in the comparable period in 2021 led to a 23.1% year on year decline in profit for the period.
This translated to an annualised return on average equity to 9.9% in the first half compared with 14.5% in June 2020, CSL Stockbrokers had explained. #FBN Holdings Sees 57% Jump in Valuation to N422 Billion in 30 Days.