19 June 2018 ( Lagos) : According to analysts at ARM Securities Limited the Nigerian equity market sustained its previous gain, closing the week slightly higher by 0.67% WoW with YTD return printing at 1.79%. Last week’s gain reflected positive price performance in ( SEPLAT ) (+6.16%), ( NESTLE ) (+3.09%), ( FBNH ) (+2.84%), ( DANGCEM ) (+1.36%) and ( GUARANTY ) (+0.85%).

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. 

( UBA ) -STRONGBUY (FVE:N14.10). Analysts expect meaningful improvement in UBA’s profitability over 2018 on the back of deposit growth, increased loan book, expansion in its trading book, healthier asset quality, lower loan-loss provision, and resilience in fee income.

Lafarge Africa Plc. ( WAPCO ) – SELL (FVE: N34.71). Despite the analyst’s expectation of improved fundamentals mainly from higher volumes, energy savings and lower finance cost, analysts believe Lafarge is still overpriced. Lafarge trades at 2018 EV/EBITDA and P/E of 9.7x and 53.3x compare to Bloomberg EMEA peers of 9.2x and 16x.

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.

Flourmills of Nigeria Plc ( FLOURMILL ) – OVERWEIGHT (FVE: N39.40). Flourmills recently raised N39 billion via rights with proceeds earmarked to pay down some of its short-term debts amongst others. Following the payment of some of its debt, analysts expect tamer finance costs and, by extension, improvement in earnings in FY 19. To add, currently lower commodity prices (sugar and wheat) guides to expansion in gross margin and improvement in operating cash flow.

PZ Cussons Plc ( PZ )– SELL (FVE: N16.57). Analyst's sell rating on PZ is premised on expected slow rebound 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 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 volumes growth, better operating efficiency, and lower finance cost which guides to improved earnings over FY 18.

Corporate Benefit Tracker

Last week

11 Plc announced its re-entry into retailing of Liquefied Petroleum Gas (Cooking gas) at some of its Mobil service stations in Lagos following over 20 years it exited the line of business.

This Week

Closure of register: Conoil Plc, CCNN Plc and Beta Glass Plc

AGM: Total Nigeria Plc, Stanbic IBTC Holdings Plc, Julius Berger Nigeria Plc, Dangote Cement Plc, Dangote Flourmills Plc, Nem Insurance Plc, Lasaco Assurance Plc, Eterna Plc, Dangote Sugar Refinery Plc and UACN Plc.

Dividend Payment: Total Nigeria Plc, Stanbic IBTC Holdings Plc, Julius Berger Nigeria Plc, Dangote Cement Plc, Nem Insurance Plc, Eterna Plc, Dangote Sugar Refinery and UACN Plc.

Source: Analysts at ARM Securities Limited.