Banks dominate late-September stock picks as NGX hits fresh record

Nigerian banks have emerged as the dominant force in late-September equity recommendations, with UBA, Access Holdings, ETI, FCMB, GTCO and Zenith Bank each receiving at least four positive ratings from a review of six brokerage reports.

The strong banking-sector showing comes as the Nigerian Exchange (NGX) continues its record-breaking run, with analysts identifying further opportunities despite concerns over elevated valuations and sharp differences in stock-price targets.

The NGX All-Share Index rose 2.78 per cent in the week ended September 18 to 249,804.56 points, taking its year-to-date gain to 60.53 per cent. It advanced another 0.14 per cent on Monday to close at a record 250,156.80 points, while market capitalisation climbed to N162.39 trillion.

The review covered recommendations from Cowry Asset Management, Morgan Capital, Blue Marina Research, Arthur Steven Asset Management, First Securities Brokers and Futureview Financial Services.

UBA attracted four positive ratings from Cowry, Blue Marina, First Securities and Futureview, with targets ranging from N50.13 to N66.07 and an average of N59.31.

Access Holdings also secured four Buy ratings, with an average target of N42.78 against a reference price of N29.15.

ETI received four positive recommendations, although its target range of N107.63 to N296.02 illustrates the wide divergence among analysts. The N296.02 target substantially lifts the average, while the median target of N114.37 presents a more conservative valuation.

FCMB joined the strongest banking consensus with four Buy ratings, while GTCO and Zenith Bank also received four positive recommendations each.

However, the bullish consensus is not universal. Arthur Steven Asset Management issued Sell ratings on both GTCO and Zenith, highlighting the significant differences in valuation assumptions among brokers.

Market analysts said investors should be cautious about interpreting average target prices in isolation, particularly where individual forecasts are unusually high or low.

An equities analyst, Shina Okeleji, noted that the divergence reflects differences in earnings projections, interest-rate assumptions, asset quality expectations and valuation methodologies.

“Investors should look at the underlying earnings outlook and valuation multiples rather than simply choosing the stock with the highest implied upside,” Okeleji said.

Another market expert said the banking sector remains central to the market because stronger earnings, dividend prospects and expectations surrounding monetary conditions continue to shape investor interest.