Analysts project 104% gain on Access Holdings on earnings outlook

Investors in Access Holdings Plc could realize more than a double return on their investments over the next 12 months.

Analysts at CardinalStone Group said they were placing a “buy” recommendation on Access Holdings because of the group’s improved earnings prospects, stronger balance sheet fundamentals, and a more favourable macroeconomic environment.

Analysts revised their 12-month target price for Access Holdings upward to N42.29, representing a potential 104.3 per cent gain on the current market price of about N20.70.

According to the earnings outlook report, the upward revision reflected moderately improved medium-term earnings expectations for Access Holdings, supported by deliberate cost-management measures, stronger fee-income performance, and sustained traction in retail and SME-driven low-cost deposits.

Analysts also highlighted the potential reinstatement of Nigeria on the FTSE Russell Frontier Market Index, which previously tracked Access Holdings, a move that could boost investor sentiment.

The report noted that despite pressures from elevated impairments in 2025, Access Holdings is projected to close the financial year with a profit after tax of N646.6 billion, a slight increase and consistent with its two-year earnings trend.

CardinalStone noted that the group’s net profit has averaged N637.9 billion over the past two years, with smoothened growth reflecting the impacts of funding and operating cost pressures.

Analysts said the banking group demonstrated resilience in its core banking operations, achieving improved cost efficiency in the first nine months of 2025.

Interest expense is projected to decline for the first time in five years, a development attributed to Access Holdings’ efforts to deepen its current and savings account base through expanding retail and SME engagement.

This traction supported the growth of net interest income even amid compressing yields driven by monetary policy adjustments in Nigeria and the United States.

CardinalStone expected the group’s net interest margin (NIM) to moderate to 4.5 per cent in the short term but identified several offsetting factors—including an improved funding mix and measured expansion in interest-earning assets—to support stability in the medium term. A 3.7 per cent growth in net interest income is projected for 2026.

The report stated that non-interest income also remains a strong pillar of the group’s performance outlook, noting that with a track record of robust growth in fee and commission income—driven by credit-related fees, electronic banking income, enhanced cross-selling, and growing digital capabilities, the group is expected to see a rebound in non-interest revenue in 2026.

According to the report, Hydrogen, Access Holdings’ payments subsidiary and Oxygen X, the group’s digital consumer-lending platform, are expected to provide incremental support as Access Holdings deepens its digital and trade finance footprint across Africa.

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The report noted that on asset quality, Access Holdings has fully exited all forbearance-related exposures and achieved full compliance with single obligor limits. While this process led to elevated impairment charges in 2025, CardinalStone anticipated a 23.1 per cent decline in impairments in 2026, supported by potential recoveries and healthier macroeconomic conditions.

The report also clarified the temporary halt in interim dividend payment, which resulted from a regulatory shortfall in paid-up share capital at the holdings company level after the Central Bank of Nigeria excluded share premium from qualifying capital.

CardinalStone noted that dividend payments could resume in 2026 once Access Holdings completes a capital restructuring or executes a capital raise to cover the N10.9 billion shortfall.

CardinalStone projected a return on average equity (ROAE) of 17.1 per cent in 2026, supported by stronger earnings and improved cost efficiency.

Analysts said with improved valuation metrics, resilient operating fundamentals, and positive macro catalysts on the horizon, the firm maintains a bullish outlook on Access Holdings.