Zenith Bank leads brokers’ buy ratings as analysts turn bullish on banking stocks

Leading stockbroking firms have identified Zenith Bank, United Bank for Africa (UBA), Access Holdings, GTCO, Ecobank Transnational Incorporated (ETI), Fidelity Bank, MTN Nigeria, Dangote Cement, AIICO Insurance, NASCON Allied Industries and NEM Insurance as some of the Nigerian Exchange’s most attractive investment opportunities, citing strong earnings, low valuations and attractive dividend prospects following the market’s June correction.

A review of investment reports by Meristem Securities, Blue Marina Research, Cowry Asset Management and Arthur Steven Asset Management showed that banking stocks dominate analysts’ recommendations as investors reposition for the second half of 2026.

The recommendations come as the Nigerian equities market rebounds from June’s sell-off, which wiped more than N13 trillion from investors’ wealth and left several fundamentally strong companies trading significantly below their recent highs.

Among all the companies reviewed, Zenith Bank stood out as the market’s strongest consensus recommendation.

The lender received Buy ratings from all four investment houses, making it the only stock to secure unanimous support.

Analysts placed an average target price of approximately N159.48, implying a potential capital appreciation of between 40 and 56.2 per cent from their respective reference prices.

The positive outlook was driven by Zenith’s attractive valuation metrics, robust profitability and consistent dividend history.

Meristem Securities reported that the bank trades at a trailing price-to-earnings ratio of 4.20 times, a price-to-book ratio of 0.85 times, while delivering a 20.18 per cent return on equity.

READ ALSO; Zenith Bank champions Nigeria as gateway for Canada-Africa trade

Blue Marina also projected a 5.6 per cent dividend yield, lifting Zenith’s expected total return to nearly 48 per cent.

UBA, Access, GTCO Attract Strong Buy Ratings

United Bank for Africa (UBA) received Buy recommendations from Blue Marina, Arthur Steven and Meristem.

The brokers projected an average target price of ₦59.92, suggesting an estimated capital appreciation of about 46 per cent.

Blue Marina remained the most bullish, forecasting a 12.4 per cent dividend yield, which pushed UBA’s projected total return above 73 per cent.

Analysts attributed the bank’s attractiveness to its diversified earnings across Africa but warned investors to monitor foreign exchange risks, asset quality and macroeconomic conditions in its regional markets.

Access Holdings also secured three Buy recommendations, although target prices varied significantly between N32.02 and N86.30.

The average target price stood at N54.17, while the median estimate of N44.18 was considered a better reflection of market consensus because it reduced the influence of one exceptionally bullish valuation.

Meristem described Access Holdings as one of the cheapest banking stocks on the exchange, trading at just 1.55 times earnings and 0.27 times book value.

However, analysts cautioned that investors should closely watch integration challenges, recapitalisation requirements and potential loan impairment risks.

GTCO maintained its position among analysts’ preferred banking stocks after receiving Buy recommendations from Blue Marina, Arthur Steven and Meristem.

The group’s average target price was estimated at N163.37, representing potential upside of between 18.8 per cent and 39.3 per cent.

Analysts said GTCO’s investment appeal continues to be supported by its profitability, strong capital position and generous dividend policy.

Meristem reported a 22.66 per cent return on equity and a price-to-earnings ratio of 5.38 times, while Blue Marina projected an 11.8 per cent dividend yield, taking the stock’s expected total return to 48.3 per cent.

Ecobank Transnational Incorporated (ETI) earned Buy recommendations from Blue Marina, Arthur Steven and Meristem.

Although target prices ranged widely between N104.82 and N240.90, analysts noted that the median estimate of N117.43 provided a more balanced valuation.

The bank’s appeal was supported by a 24.43 per cent return on equity, 79.04 per cent net margin and a price-to-earnings ratio of 2.33 times.

However, analysts warned that ETI’s multinational operations expose it to currency volatility, changing regulatory environments and country-specific credit risks.

READ ALSO; Zenith Bank tops awards list as Toyota Nigeria celebrates three decades of excellence

While Cowry Asset Management, Blue Marina and Meristem advised investors to accumulate the stock, Arthur Steven maintained a Hold rating, suggesting that the stock had moved closer to fair value.

The average target price stood at N23.58, with upside estimates ranging from 5.9 per cent to 63.6 per cent.

Outside the banking sector, AIICO Insurance, NASCON Allied Industries, MTN Nigeria, Dangote Cement and NEM Insurance emerged as the strongest consensus recommendations.

AIICO received Buy ratings from Blue Marina, Arthur Steven and Meristem, with target prices clustering between N5.64 and N5.80, reflecting one of the strongest valuation agreements among analysts.

The stock offered an average upside of approximately 44 per cent, supported by improving underwriting performance and stronger earnings.

Analysts cited tariff adjustments, growing data consumption, expanding network investments and increasing adoption of digital and artificial intelligence services as major growth drivers.

Capital market experts said the June market correction has created compelling opportunities for long-term investors, particularly in fundamentally strong companies whose share prices declined despite healthy earnings.

According to analysts, the dominance of banking stocks in brokers’ recommendations reflects the sector’s resilient profitability, strong capital positions and ability to sustain dividend payments despite economic uncertainties.

They noted that moderating inflation, improving foreign exchange stability and expectations that interest rates may eventually peak are likely to support corporate earnings and boost investor confidence during the second half of the year.