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Analysts at Cordros Research have updated their views on Guaranty Trust Holding Company Plc (GTCO) following the release of the group’s 2024 audited results.
The analysts expect GTCO’s core earnings to remain resilient in 2025, driven by improved credit creation and investments in securities.
The stability of the naira is expected to limit foreign exchange gains, which constituted 64.2% of the group’s non-core income line in 2024. As a result, the analysts anticipate a decline in non-core earnings.
Despite the expected decline in EPS due to the dilutive effect of new share issuances, the analysts have increased their target price by 27.3% to ₦92.77 per share and maintained their “BUY” rating. The analysts project a final DPS of ₦9.20 in 2025, translating to a dividend yield of 13.5%.
GTCO’s capital adequacy ratio (CAR) increased to 39.3% following the massive addition to retained earnings. The group plans to direct the excess capital towards branch expansion, IT investments, and working capital needs.
The analysts’ target price is derived from a blend of valuation methods, including the Dividend Discount Model, Gordon Growth Model, relative P/E, and relative P/B. GTCO is trading at a 2025E P/E of 2.9x and P/B of 0.8x.
