UBA Investors Get 41% on Money Invested Since January

UBA Investors Get 41% on Money Invested Since January

United Bank for Africa, UBA Plc, was the only Tier-1 lender that posted gains in the equity market last week, bucking the negative trend on the Nigerian Exchange (NGX) trading platform with positive price appreciation that lifted its market value to N2 trillion.

MarketForces Africa Research highlighted that UBA shareholders’ portfolio value increased by about N33 billion in the local bourse, making it a lone gainer among Tier-1 names. With a 41% year-to-date return, the Pan African lender courted investors’ attentions amidst fading bargain hunting in the local bourse in the absence of fresh catalysts that had fuelled rallies across sectorial indexes.

This suggests UBA has sufficiently outperformed the Nigerian Exchange All Share Index, which closed on Friday with a year-to-date return of 36.31%. At the close of the trading session last week, the market value of UBA Plc increased to N1.996 trillion on 41.039 billion shares outstanding.

The financial services group price movement increased by about 2% compared with the negative performance of the Nigerian Exchange. Last week, UBA’s stock market performance eased the overall banking index loss.

Data from the Nigerian Exchange showed that UBA share price settled at N48.65 on Friday as 7.852 million units valued at N382.032 million were traded in the local bourse. The huge trading volume was led by sell-side traders who sought to take profit ahead of the financial services group’s earnings release.

Reflecting the overall mood in the stock market, UBA had its share of price volatility last week. The banking stock had peaked at N49.5 midweek before it slipped, albeit slowly. Still, UBA market value increased by N32.831 billion week on week, reflecting a stronger overall market perception.

Equity Analysts Expectations and Recommendations

Equity analysts sampled by MarketForces Africa Research have different expectations about the group expected earnings stream, with varied evaluations of the group business fundamentals.

Cowry Asset Management Limited is the most optimistic investment firm that sets the highest price target of N74.30 for UBA Plc ahead of the Pan African lender first half of 2025 earnings release. The investment firm sees potential for strong upside with buy rating for UBA at the current UBA where others played soft.

MarketForces Africa reported that the market anticipates UBA earnings release, and an interim dividends notice would fuel a fresh rally that has the potential to push its market value upward. Equity analysts at Alpha Morgan Capital Limited estimated a price target of N67.20 for UBA Plc, suggesting an expectation of a much higher return at the current market price in the local bourse.

In its stock recommendation, Apel Asset Limited reported that the banking group has delivered a 41.03% year-to-date return to investors; hence, analysts set a much lower price target of N52.92 – just N2.37 above UBA highest market price of N50.55 in 52-week.

A similar estimate from Atlass Portfolio Limited signals limited upside potential, as analysts place UBA target price at N52.50 as per details from its stock recommendation. With buy rating, equity analysts at Afrinvest Securities Limited set UBA target price at N63.13, hoping for about 32% upside potential at a reference price of N47.95.

Atlass Portfolio Limited thinks N52.50 is the right target price for UBA Plc, which analysts followed up with a hold or neutral recommendation due to limited upside potential of 9.49% at a reference price of N47.95 last week.