By Jide Ajia
A finance and investment solution firm, Meristem Securities, has placed buy recommendation for equity investors to take position in current shares of an indigenous oil and gas firm, Forte Oil.
The leading investment adviser stressed that the upgraded recommendation was a target price of N77.41 from N64.09, implying a 68 percent increase from the last close, matching a consensus average of N77.41.
It would be recalled that Meristem Securities recently advised investors in the equities market to hold shares of Forte Oil, following its prospects on the floors of Nigerian Stock Exchange (NSE).
However, one of the major global provider of financial news and analysis, said that investors who followed Meristem Securitas’s recommendation would have received a 58 percent return in the past year before today, compared with the negative 78 percent return on the shares.
Three years ago, Meristem Securities has rated Forte Oil hold once, buy once and sell once, even when the shares fell 23 percent in the period rated hold, it further fell 11 percent in the period rated buy and rose 146 percent in the period rated sell.
Analysts raised their consensus one-year target price for the stock by 4.8 percent in the past three months with forecasts range from N61.44 to N202.87.
Meristem Securities covers 21 companies; 10 were rated under review, 6 were rated hold, 3 were rated buy and 2 were rated sell. Also, foremost ratings and research agencies, Agusto and Co. and Global Credit Rating Co. (GCR), had recently affirmed Forte Oil investment grade rating.
Both agencies stated that the long term outlook for the oil and gas company remained stable and accorded to Forte Oil based on the company’s top-tier position in the Nigerian downstream sector, underpinned by a strong and visible brand, significant assets across the energy value chain, and strong relationships with suppliers, strong corporate governance framework, and an experienced and stable management team.
The stock closed flat on Friday at N57.96 per share with an EPS of N2.93 and PE ratio of N19.76.