After a disappointing May, Nigeria’s equity research analysts seem more optimistic about a positive outcome in June due to the attractive pricing for fundamentally sound stocks. As “buy” opportunity persists, investors are expected to continue their bargain hunting activities this week, particularly as we approach the half-year (H1) earnings season.
The record dip in May (-3.52percent) presented opportunities for value hunters to renter the market.
“Investor sentiment appears to firmly favour the bulls”, said equity research analysts at Lagos-based Vetiva Capital, who also expect the market trading activity to remain positive this week.
Moreover, there are stocks that Vetiva considers highly undervalued, but with strong fundamentals –thereby urging investors to buy.
This week, the stocks on Vetiva analysts’ “buy” list are GTBank, Zenith Bank, UBA, Access Bank, FBN Holdings, FCMB, Stanbic IBTC, Flour Mills, Dangote Sugar, Dangote Cement, Julius Berger, MTNN, Total, and Ardova.
These stocks are said to have potential return in excess of or equal to 15percent realizable between their current prices and the analysts’ target prices.
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Also, Lagos-based GTI Research analysts in their outlook for the week ending June 18, 2021, said they except mixed sentiment to persist, “as the bull will take advantage of the depreciated stock low prices and the bear take profit from recently appreciated stocks”.
They want investors to buy stocks like GTBank, Access Bank, UBA, Sterling Bank, Fidelity Bank, Dangote Sugar, Flour Mills, and Africa Prudential.
According to GTI research analysts, the upside potential of these stocks over the next 12-months is significantly high when their current prices are compared to the analysts’ fair value –hence, they urge investors to take positions.
“We think that at current levels, the equities market still presents attractive bargain hunting opportunities on some light and heavyweight tickers.
“Thus, we expect investors to take full advantage of this. Considering all of these, we expect the equities market to close in the positive territory this week”, said Meristem research analysts.
Meristem wants investors to buy Access Bank, ETI, Fidelity Bank, FBN Holdings, GTBank, Stanbic IBTC, UBA, Union Bank, Zenith Bank, AIICO, NEM Insurance and Custodian.
They believe that the Target Prices (TPs) of these stocks are above their current market prices by at least 10 percent.
Other stocks on Meristem analysts Buy list are Dangote Sugar, Presco, May & Baker, Fidson Healthcare, GSK, Neimeth, Lafarge, Julius Berger, Conoil, MRS, and MTNN.
Despite their expectation that the equities market will record some negative performance this week “as investors book some of their profits off the market”, United Capital research analysts in their stock recommendation for the week still urged investors buy Fidelity, GTBank, Zenith Bank, Stanbic IBTC, Dangote Sugar, International Breweries, Flour Mills, Dangote Cement, Lafarge, Total, and Ardova.
