A report by Faida Investment Bank recommends long term buy for banking firm, Equity Group Holdings. According to the report, Equity’s one-year target price is set at Ksh54 per share; equivalent to a 30.9 per cent upside potential given the shares closing price of Ksh41.35 on 22n February.
The recommendation is based on Equity’s current business model which is focused on ‘technology, innovation and business diversification’.
The bank has adopted new strategies to address challenges in the banking industry. Some of the changes are;
- Growing non-funded income
- Regional diversification, innovation and digitization and
- Cost optimisation
FIB analysts are confident that Equity’s business model will promote growth of the company’s share value and keep it above its peers in the banking sector.
The bank is set to receive $100 million from the International Financial Corporation to be used to boost capital in its Kenyan subsidiary and to lend to small and
As at 22n February, Equity Group shares traded at a price to book ratio of 1.68 times, higher than the banking sector’s average price to book ratio of 0.98 times. Analysts at Faida Investment Bank attribute the high ratio to investors’ expectations of growth in Equity’s share value.