Analysts at CardinalStone have revised their target price for Guaranty Trust Holding Company Plc (GTCO) on the Nigerian Exchange, setting a new 12-month target of N115.93 per share.
Despite GTCO’s softer half-year results, the analyst maintained a positive stance on the share price, citing stronger long-term growth prospects and improving performance trends.
In their equity research report titled “Renewed Loan Growth Momentum Lifts Outlook,” they highlighted an improved five-year forecast, with net interest income expected to grow at a compound annual growth rate (CAGR) of 18.4%, up from 13% earlier.
They also projected gross earnings to rise by 5.3% year-on-year to N2.2 trillion in full-year 2025, supported by a sustained increase in interest-earning assets.
The analysts further noted the resilience of GTCO’s loan portfolio, citing a drop in Stage 2 loans to 1.8% from 2.6% in FY 2024 and 16.3% in 2023, reflecting improved asset quality.
Considering these positive fundamentals, CardinalStone maintained a BUY rating, at reference price of N94 and a target price of N115.93.
The analyst noted that GTCO’s loan portfolio has remained strong, with asset quality improving as Stage 2 loans dropped to 1.8% from 2.6% in FY 2024.
However, due to higher impairment charges linked to syndicated Oil & Gas exposure, the FY 2025 impairment forecast was raised to N83.5 billion, lifting the cost of risk to 2.2% from 2.0% previously.
Gross earnings are projected to grow by 5.3% year-on-year to N2.2 trillion, supported by a 29.5% rise in interest-earning assets.
This growth is driven by stronger loan expansion and stable yields, with interest income expected to rise by 27.9% to N1.7 trillion by year-end.
Meanwhile, the analyst adjusted the full-year non-interest income forecast downward to N513.1 billion, reflecting weaker first-half results and limited FX revaluation gains.
Overall, management’s focus on expanding loans in the Manufacturing, Oil and Gas, Retail, and SME segments reflects a stronger growth strategy amid easing interest rates.
So far this year, GTCO shares have risen over 64% on the Nigerian Exchange and now trade around N93, a level that may offer investors a good buying opportunity.
GTCO began the year at N57 on the Nigerian Exchange, reaching N68.80 by the end of March 2025, representing a 20.7% gain in the first quarter.
Although the second quarter opened with a 4.9% decline in April, strong gains in June lifted overall Q2 performance to 18.1%, with the stock breaking past the N80 mark to close at N81.25.
In the third quarter, particularly in July, GTCO became the first Nigerian banking stock to cross the N100 threshold, followed closely by Stanbic IBTC.
In the third quarter, particularly in July, GTCO became the first Nigerian banking stock to cross the N100 threshold, followed closely by Stanbic IBTC.
The stock later dipped to N92 in August, likely creating a buying opportunity for investors eyeing another push above N100.