Looking to 2027 for the uplift

研报英文原文证据摘录

Looking to 2027 for the uplift

Accessible version

Absa Group Ltd

Reiterate Rating: NEUTRAL | PO: 254.00 ZAR | Price: 227.92 ZAR

ROE potential priced in; evidence of 16-19% ROE required 01 July 2026

We reduce our 2026E EPS by 5% due to lower revenue growth evident in Absa’s 1H26 Equity

trading update. We expect lower NIM to remain a headwind in Absa’s Africa Regions

segment in 2027-28E, which reduces our NII by 2-3% and our EPS by 2.2-3.5%.

Key ChangesHowever, we believe the management team refresh and improved competitiveness,

notably in CIB, still support positive operating leverage and ROE expansion in 2027-28E. (ZAR) Previous Current

We expect 15.5% ROE in 2028E. Higher revenue growth, possibly evident in the 4Q26 Price Obj. 262.00 254.00

CMD, is required to reach management’s 16-19% ROE. We believe Absa’s 2025 P/BV of 2026E EPS 32.88 31.26

1.1x reflects its ROE and growth potential (9% 3Y EPS CAGR). We reduce our PO to 2027E EPS 35.63 34.39

ZAR254 (from ZAR262) on lower ROE and reiterate our Neutral rating. 2028E EPS 38.68 37.83

2026E DPS 18.27 17.37

Lower NIM likely to persist in 2027-28E

Based on Absa’s 1H26 update, 1Q26 results in Kenya, Ghana and Mauritius, and recent Harry Botha >>

Research Analyst

increases in cash reserving requirements in Ghana and Mozambique, lower NIM and Merrill Lynch (South Africa)

muted lending growth constrained Absa’s NII in 1H26. While easing global inflation and +27 113 055 152 harry.botha@bofa.com

war risks could support higher lending growth in the future, we expect NIM headwinds to

persist in 2027-28E, reducing our NII growth expectations by 2-3%. NII pressure in

Africa also does not offset management’s comments of improving SA earnings growth.

Stock Data

Growth lever needs to shift to revenue from costs Price 227.92 ZAR