GTCO Gets N128 Share Target on Expected Russell Inclusion, Re-Rating to Mirror EMEA Peers

Guaranty Trust Holding Company (GTCO) has received a share price target of N128.63 Per Share as the stock is set to track valuation of Europe Middle East and Africa (EMEA) peers on potential Russell index inclusion.

“On valuation, we have reduced our equity risk premium to 13.8% (from 14.3%). We also consider the potential re-inclusion of Nigeria to Frontier Market status by FTSE Russell, which could trigger a re-rating of GTCO toward valuation levels more consistent with its EMEA peers,” said Cardinal Stone Partners analysts led by Philip Anegbe in a December 09 note to clients.

“All in, we revise our 12-month Target Price (TP) to N128.63 and maintain our BUY rating on the counter.”

The new TP implies a potential upside of 42.8% (from the current reference price of N90.05).

GTCO continues to distinguish itself as Nigeria’s most operationally efficient bank, reflected in its consistently superior cost-to-income ratio (CIR), cost of risk (CoR), and cost of funds (CoF) relative to Tier-1 peers in recent years (see chart below).

Cardinal Stone expects this outperformance to persist in Full Year 2026, supported by the Group’s strategy to deepen its retail banking franchise that is helping to attract cheaper and stickier deposits and easing funding pressures amidst a mostly dovish monetary policy cycle.

Non Interest Revenue is forecast to rebound to N522.1 billion (+12.6% YoY) in 2026, on the back of sturdy fee-based income and an improved derivative investment play.

The assumption for fee-based income is partly supported by an expected positive passthrough of loan book expansion on credit related fees and growing traction in GTCO’s fund management, pensions, and payment verticals.

Cardinal Stone also views the successful transition of the Group’s core banking platform to Finacle as positive for electronic and fee-based income lines amidst the implied better tech-led efficiencies.

“On the strength of the above analysis, operating income is set to grow by 14.7% year-on-year (YoY) to N2.0 trillion in Full Year 2026. FY’26 bottom-line is also likely to print stronger at N1.1 trillion (+18.8% YoY), with an EPS of N30.65.”

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