Stock Recommendations
Local stocks are expected to maintain an uptrend in 2026 after posting stellar growths in 2025. This is expected to be backed by anticipated economic expansions, easing lending rates and low inflation levels.
The projected uptick will further be accelerated by the upcoming earnings for 2025 due in March 2025, where better results and improved returns on investment are forecasted. We however do not expect the surges to match those witnessed in 2025. As such we recommend the following stocks for your investing considerations:
Safaricom – Long-term Buy
The counter has gained 4.6% from our last recommendation of Dec-2025 to trade at KES 29.30 as of 14th January 2025. Its 12-month high and low prices stand at KES 30.50 and KES 17.05 per share, respectively. The counter hit a 12-month high of KES 30.50 in early November 2025, immediately after the government intention to divest its 15% stake. Its 12-month low stands at KES 17.10 per share, while averaging at KES 28.72, KES 28.27 and KES 24.0 in the last 3-, 6- and 12-month 3 per share respectively.
Its price expansion is informed by its strong half year 2026 (HY2026) results, Ethiopia subsidiary developments, and the expected interim dividend for HY2026 expected to be announced in Jan-2025, and final dividend later in the year.
On its half year 2026 financials, Safaricom reported a 63.1% surge in its profit before tax (PBT) to KES 55.24Bn supported by higher revenues and the thinning Ethiopia losses while progressing to break-even period.
The counter is set to receive reprieve from loan interest obligations after securing a green bond of KES 20.00Bn that was oversubscribed at 175.7% or KES 41.60Bn, signaling confidence in the counter despite a low coupon of 10.4%.
The Government priced the counter at KES 34.00 per share, a 16.0% upside from the current pricing of KES 29.30, which is 5.9% below our fair value of KES 36.00 per share, a 22.9% upside from the current price.
HF Group – Long-term BUY
Trading at KES 10.50 per share (14th Jan 2025), the Group’s price has attracted 11.0% from our last recommendation and continues to reap from its recent transition to a full-service Bank, and overall improved counter valuation. This saw the Bank return to profitability supported bolstered by capital injections.
Its 12-month high and low prices are KES 11.00 and KES 5.40 per share, respectively. Its 3-, 6 and 12-months average price stands at KES 10.17, KES 9.74 and KES 8.44, respectively.
On its Q3-2025 financials, the Group reported a 264.9% spike in profits before tax from KES 312.26Bn to KES 1,139.27Mn, continuing unlock its potential after a capital boost of KES 6.38Bn from a rights issue.
The Group is expected to maintain an upward trajectory in profits as it fully unlocks its business potential fronted by the successful rights issue, that brought in KES 6.38Bn to support its retail banking. This is as retail banking remains to be the bread and butter for the banking industry.
I&M Group – BUY
The counter’s price has attracted 4.7% to KES 44.90 per share as of 14th January 2025 from our last recommendation in Dec-205. The Lender’s 12-month high and low prices are KES 46.05 and KES 29.55 per share, with averages of KES 44.31, KES 41.94 and KES 37.96 per share in the last 3-, 6- and 12-months, respectively.
I&M Group reported a 25.8% rise in PBT from KES 14.11Bn in Q3-2025 KES17.75Bn in Q3-2025, strongly supported by stable and rising interest incomes, low cost of financing and higher non-funded incomes. Its profit after tax were up 27.4% to KES 12.68Bn resulting to a 15.4% rise on its interim dividend from KES 1.30 to KES 1.50 per share.
The counter’s financial performance continues to reap from its ambitious strategy of local regional expansion, digital transformation and new growth initiatives financed by a KES 4.19Bn capital injection raised in early 2025, following a successful strategic issuance of 86.50Mn shares valued at KES 48.42 per share. This is in a bid to reap from the local retail market by expanding its branch network.
We retain a long-term BUY recommendation on the counter with a fair price of KES 48.42, a 7.8% upside plus a remaining dividend return of above 6.7%, giving a total return of above 14.5% in the next 3- to 6-months.
Stan-Chart – Long-term Buy
The counter has attracted 6.8% rise from our December recommendation to trade at KES 308.00 per share as of 14th Dec 2026. It’s 12-month high and low prices are KES 341.50 and KES 261.50 per share, respectively.
Stan-Chart’s price plunged from KES 341.40 in mid Aug-2025 to a low of 280.50 per share on 8-Oct-2025, impacted by Supreme Court decision to pay KES 7 billion pension liability to some oof its former staffs. The Bank however remain well financed and capitalized as evidenced by a good credit rating and financial performance.
On its Q3-30325 financials, the counter reported a 41.2% dip in PBT from KES 22.47Bn in Q3-3024 to KES 13.20Bn in Q3-2025. Profits after tax went down 38.2% to KES 9.79Bn. The Bank’s management alluded to revenue drop and a one-off employee past service cost of KES 2.70Bn.
We retain a long-term BUY recommendation of about two years at the current pricing of KES 308.00 with a fair price of above KES 330.00 per share, a 7.1% capital gain upside plus an above 8.0% dividend yield, a total return of above 15.1%. This is even as the Bank remains profitable and among the best dividend paying stocks with a dividend policy of at least 80.0% of its earnings.
