Analysts See 75% Upside in Airtel Africa Stock



Analysts See 75% Upside in Airtel Africa Stock

Analysts See 75% Upside in Airtel Africa Stock

Traded at N1,400 per share in the stock market, Airtel Africa’s valuation jumped to N5.26 trillion as the telecom company reversed losses due to increased buying interest – spread over the company’s 35.895 billion shares outstanding.

For equities investors, there is no love lost for company shares that give higher returns amidst the rising inflation rate in Nigeria. The current year has proven positive for investment plays in certain market-moving stocks.

After the share price plunged from N2040 in the first half, equities investors have started seeing a new trend forming around Airtel Africa. The telecom company stock had peaked before negative sentiment dragged its market price lower.

The price slump had created new entry points for stockholders, though the earnings performance of Airtel Africa hit the iceberg in the first half of 2023 – stoked by the devaluation of the Nigerian naira.

Other African countries also reported forex risk as the US dollar, its reporting currency, gained weight. Demand for the telecom stock is expected to jump as foreign investors seeking to repatriate funds abroad rotate their portfolio to leverage Airtel Africa’s dual listing.

In its market update, equities analysts at Cowry Asset Research rated Airtel Africa stock a buy as the estimate provides that the telecom has a 75% potential upside at the current price.

The investment firm expects the telecom company’s share price at N2,450 in the next 12 months with N1,190 as a short-term stop loss price. In the last 52 weeks, Airtel had hit the bottom at N1,175.

In the market update, analysts at Cowry Asset however pegged short term take profit price at N1,610. In a note, CardinalStone analysts said they are positive about the future earnings growth of the telecom firm.

The firm anchored its bullish view on the telecom company’s mobile money performance.  The growth outlook remains biased to the upside, with ample room for more financial inclusion given the large unbanked population in its sphere of operations.

With a payment service bank license, Airtel Africa could earn income from the issuance and use of Automated Teller Machine (ATM) cards, with the low ATM per capita of 16.2 per 100,000 in Nigeria highlighting the immense potential, CardinalStone wrote. #Analysts See 75% Upside in Airtel Africa Stock

Naira Devaluation Deepens Economic Crisis in Nigeria

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