21 November 2018 : The Nigeria equity market closed negative with the All Share Index moderating by 0.44% WoW to close the week at 32,058.28 pts. The negative performance was spurred by sell pressure in Nestle (-9.99%), Access (-9.92%) and Oando (-9.69%). Dissecting the sectoral performance, the Food, Personal Care, Insurance and Oil & Gas recorded gains during the week, as opposed to the Banking, Brewers, Cement, Construction and Real Estate sectors that closed negative.

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Fidelity Bank Plc – ( FIDELITYBK ) BUY (FVE: N2.92). Analysts are now more optimistic over their expectation for earnings growth over 2018 largely on the back of lower loan-loss provisioning. Analysts have revised their FY 18E EPS higher to N0.82 (previously N0.76) which is 25% higher YoY. Their FVE of N2.92 (previously N2.82) translates to a BUY rating on the stock. Based on current price, analyst's dividend expectation translates to a dividend yield of 8%.

Nestle Nigeria Plc – ( NESTLE ) SELL (FVE: N1330.35): Analysts expect NESTLE to report strong earnings with FY 18E EPS of N56.89 (+33.7% YoY), supported by expansion in gross margin and a significant decline in interest expense. However, from a valuation standpoint, analysts think the stock is expensive at current pricing. NESTLE currently trades at a P/E of 27.8x relative to MENA peers and 5-year historical average of 24.7x and 27.3x respectively.

Unilever Nigeria Plc – ( UNILEVER ) STRONG BUY (FVE: N47.58). Unilever is analyst's top pick in the consumer space with FY 18E EPS expectation of N2.11 (+18.2% YoY), based on revenue growth (+9.7% YoY) and significant moderation in interest expense (- 90.1% YoY) – following the sizeable deleveraging of its balance sheet.

Okomu Oil Palm Plc – ( OKOMUOIL ) STRONG BUY (FVE: N97.75): Over their forecast period, analysts anticipate volumes growth emanating from the harvest of fresh fruit bunches from its extension 2 plantation. Based on their expectation for volumes growth and accompanied margin expansion, analysts raise their FVE to N97.75.

Total Nigeria Plc – ( TOTAL ) STRONG BUY (FVE: N244.28). Analysts upgrade their FVE on Total Nigeria Plc to N244.28, as analysts now model a 24% hike in domestic petrol price to N180 per litre and increase in finance income in 2019 - following robust subsidy receivables as at H1 18.

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Last week

Seplat Plc announced the renewal of its mining licenses – OMLs 4, 38 and 41 – with a new expiry date of 21 October 2038. Seplat holds a 45% working interest in OMLs 4, 38 and 41. Click here to read more.

The Initial Public Offering (IPO) of Skyway Aviation Handling Company opened for subscription on Monday, 12 November 2018 and will close Wednesday, 19 December 2018. Click here to read more.

Access Bank and Diamond Bank released press reports to debunk a rumour about a merger and acquisition between the both banks. Click here to read more.

This week

Closure of Register: Nigerian Breweries Plc, Prestige Assurance Plc. Click here to view full corporate actions thus far in 2018

Reporting for EasyKobo on Wednesday , 21 November 2018 in Lagos, Nigeria

Source: ARM Securities Limited

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