Tuesday, January 22, 2019 1:03:59 PM- Nigerian Stock Exchange.



  Stock Recommendations for the week of 09 July 2018

      

09 July 2018 ( Lagos ) :The NGSE ASI reversed previous gains to decline 1.71% WoW last week, closing at 37,625.59 pts. The decline was largely due to negative performances in Forte Oil (-19.79%), Lafarge (-4.76%), Nestle (-4.76%), Zenith Bank (-2.80%), Nigerian Breweries (-2.71%), Unilever (- 1.90%) and Dangote Cement (-1.75%). 


On a sectorial basis, the Oil & Gas (-5.69%), Food (-4.16%), Personal Care (-3.47%), Brewers (- 2.49%) and Cement (-1.94%) sectors closed in red, offsetting gains in the Construction (+4.53%) and Insurance (+0.53%) sectors. According to analysts at ARM Securities Limited, below are the stock recommendation for this week.


All opinions and recommendations on below stocks are from analysts at ARM Securities limited. Easykobo does not endorse or oppose any recommendations expressed in this article. 


United Bank for Africa Plc ( UBA ) – STRONG BUY (FVE: N14.10). Analyst's expect meaningful improvement in UBA’s profitability over 2018 hinged on growth in its deposit, increased loan book, expansion in its trading book, healthier asset quality, lower loan-loss provision, and resilience in fee income.


DangoteCementPlc–( DANGCEM ) OVERWEIGHT(FVE:N256.85).Analyst's remain broadly positive on DANGCEM and expect the company to sustain earnings growth, albeit at a much slower pace than 2017. Specifically, they see volume induced revenue growth and lower energy cost as key drivers of earnings in FY 18, relative to the price-induced growth story in prior year.


Guinness Nigeria Plc ( GUINNESS )– SELL (FVE: N88.21). Guinness is poised for further earnings recovery into 2019 underpinned by lower operating and finance expenses. However, from a valuation standpoint, analysts believe the stock is expensive due to the dilutive impact of the recently concluded rights issue.


Dangote Sugar Refinery Plc – ( DANGSUGAR ) NEUTRAL (FVE: N20.23). Analysts are cautiously optimistic on Dangote Sugar due to the recent smuggling of cheaper refined sugar which impacted on the company’s market share and, by extension, revenue. Irrespective, they believe the moderation in input costs would provide some support to 2018 earnings.


PZ Cussons Plc – ( PZ ) SELL (FVE: N16.57). Analyst's sell rating on PZ is premised on expected slower recovery in volumes due to weak income levels. Additionally, the recent rise in Brent crude is expected to stoke pressures on petrochemical prices which would weigh on gross profit and earnings.


Seplat Petroleum Development Company Plc – ( SEPLAT ) STRONG BUY (FVE: N975.27). The case for Seplat remains higher crude oil prices and volumes, unrecognized capital allowance, reserve accretion, higher receipt from crude oil lifted in OML 55 as well as the company’s extended debt maturity profile which feeds into an improved cash position.


Okomu Oil Plc – ( OKOMUOIL ) NEUTRAL (FVE: N102.33). Okomu is analyst's most preferred pick in the Palm oil sector, as 2018 presents opportunities for stronger growth in volumes, better operating efficiency, and lower finance cost which guides to improved earnings over FY 18.


Corporate Benefit Tracker

Last week


First Bank of Nigeria Ltd announced its intention to exercise its option to redeem its $300 million 8.25% Eurobond, due in August 2020. Click here to read more.


C&I Leasing Plc announced the successful issuance of its N7 billion series 1 bond issuance programme. Click here to read more. This Week


Closure of Register: Presco Plc, Learn Africa Plc and The Initiates Plc.


AGM: Conoil Plc.


Dividend Payment: Cadbury Nigeria Plc.


Reporting for EasyKobo on Monday, 9 July 2018 in Lagos, Nigeria


Source: ARM Securities Limited


NOTE - THIS ARTICLE PUBLICATION IS COPYRIGHT OF ARM SECURITIES LIMITED AND NOT TO BE REPRODUCED OR REPRINTED IN ANY FORM WITHOUT THE EXPRESS PERMISSION OF ARM SECURITIES LIMITED.


     




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