Update shared on03 Jun 2025
Subject: Access Holdings Plc Poised for Re-Rating as Analysts See Over 60% Upside Potential
Access Holdings Plc is attracting renewed attention from equity analysts, who believe the stock is significantly undervalued relative to its Tier-1 banking peers, with upside potential ranging between 44% and 63%.
Key Points Driving Analyst Optimism:
Valuation Gap: Despite its evolution into a diversified financial services group, Access Holdings is still priced like a traditional bank, with a market capitalization of approximately N1.2 trillion. Analysts argue this undervalues its portfolio of cash-generating subsidiaries, which span asset management, pensions, insurance, and international banking.
IT and Digital Infrastructure Investments: Access Holdings has made strategic investments in its core banking and digital platforms, positioning it to expand net interest margins and grow fee and commission income. These enhancements are seen as instrumental to sustaining long-term profitability.
Growing International Footprint: The group’s cross-border banking capabilities are expanding rapidly, with trade finance activities launched in Morocco and Egypt, and further expansion planned via Access Malta. These initiatives will enhance foreign exchange earnings and support non-interest revenue, which is expected to grow 15.3% to N1.5 trillion in FY 2025.
Strategic Acquisitions: Access Bank recently completed its acquisition of National Bank of Kenya, marking a strategic milestone in East Africa. Combined with its existing footprint in the UK, France, and soon Malta, the acquisition strengthens Access’s pan-African presence and supports broader trade and remittance flows.
Synergy Potential: The Access ARM Pension merger (N3.3 trillion in AUM, 2.1 million accounts) and upcoming insurance cross-sell opportunities are seen as key drivers of non-interest income and operational leverage.
Attractive Dividend Record: The group’s interim dividend of N1.00/share, up from N0.45/share in H1 2024, reflects confidence in earnings strength and provides an additional yield-based incentive for investors.
Target Price Estimates: Dynamic Portfolio Limited places fair value at 25.00, suggesting a 15% upside because of Profit margins (26.5%) are lower than last year (41.5%) and Shareholders have been substantially diluted in the past year
Apel Securities Limited places fair value at N31.67, suggesting a 44% upside.
CardinalStone Securities sees fair value at N35.84, implying a 63.3% upside from the current level.
Outlook:
Access Holdings is transitioning into a financial conglomerate with diversified revenue streams, extensive geographic coverage, and scalable digital infrastructure. With analysts pointing to a significant valuation discount, rising non-interest income, and cross-border expansion, the stock offers a strong value proposition. Investors seeking exposure to a growth-oriented, dividend-paying financial institution with pan-African ambitions may find Access Holdings well-positioned for outperformance in the coming quarters.
Disclaimer
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