Analysts at CardinalStone have maintained a Buy rating on Access Holdings Plc shares on the Nigerian Exchange (NGX), revising their 12-month target price upward to N52.14 from N45.12. This revision suggests a potential upside of 106.1% from the current reference price of N25.30.
The equity research report, titled “Upward Revision in TP on Improved Funding Outlook,” indicates a strategic pivot at the Group. Access Holdings is moving from aggressive expansion towards a focus on earnings quality and capital optimization.
At the current reference price, the new target price represents an exit Price-to-Book (P/B) of 0.6x. This is above the stock’s 10-year mean P/B of 0.4x but still below the Middle East and Africa peer average of 1.4x.
According to CardinalStone analysts, FY’25 marked a transition year for Access Holdings, with management now entering an execution-focused phase centered on sustainable value creation.
A central focus of the Group’s strategy is the deliberate restructuring of its foreign currency (FCY) funding mix. This involves moving away from costly corporate treasury deposits toward lower-cost transactional balances, collection mandates from International Oil Companies (IOCs), and government-related flows.
In pursuit of this strategy, the Group repaid approximately $500 million (about N692.6 billion at Q1’26 average exchange rates) to depositors. Analysts believe this move drove a 26.9% year-on-year decline in interest expense to N556.2 billion in Q1 2026.
The ratio of funding costs to interest income has averaged 61.1% over the last three years, which is well above the circa 32.8% of Tier-1 peers, pointing to significant room for improvement.
As a result, CardinalStone now expects Cost of Funds to moderate to 5.0% in FY’26, down from 5.7% in their previous estimate and 6.1% recorded in FY’25. They project Net Interest Income to grow by 32.6% year-on-year to N1.8 trillion in FY’26, with Net Interest Margin (NIM) rising above the management target of 5.0%, compared to 4.5% in FY’25.
The Group’s gross loan book expanded by 16.4% year-on-year in FY’25 to N13.7 trillion and further by 23.4% year-on-year in Q1’26 to N13.9 trillion.
However, analysts noted that this growth has been driven disproportionately by the international business, particularly The Access Bank UK, which now accounts for 35.1% of banking subsidiary loans, up from 22.7% in FY’24. This shift in loan mix came at a margin cost, contributing to a 5.6 percentage point decline in asset yields to 11.8% in FY’25, as international lending commands lower margins than the Nigerian market.
