Stock Recommendations: Investment Opportunities
Stocks have continued to deliver strong gains, supported by improved half-year earnings and attractive interim dividend payouts. While the market has experienced mild profit-taking over the past month as investors locked in gains accumulated earlier in the year, the underlying fundamentals of many counters remain solid.
The recent pullback has created attractive entry opportunities, with several fundamentally strong stocks now trading at appealing prices. We believe these counters offer compelling upside potential for investors seeking long-term capital appreciation and sustainable dividend income. Accordingly, we recommend the following stocks for your investment consideration.
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Safaricom – LONG-TERM BUY
Safaricom, which is currently trading at KES 34.40, has delivered impressive returns, gaining 14.5% and 13.5% over the past 6 and 12 months, respectively, while year-to-date, the counter has advanced by 20.7%. During this period, the stock traded within a range of KES 27.50 and KES 39.00 per share.
Safaricom Plc reported a 72.5% increase in HY2027 PAT to KES 50.35Bn, supported by strong mobile service revenue growth, particularly in M-Pesa and mobile data, alongside prudent cost management. Total revenue rose by 14.2% to KES 233.68Bn, while mobile service revenue grew by 12.4% to KES 213.68Bn. Performance was further boosted by narrowing Safaricom Ethiopia’s losses as the subsidiary progresses towards profitability.
Safaricom Ethiopia reduced its loss before tax by 43.8% to KES 16.28Bn and net loss by 43.0% to KES 16.60Bn. The subsidiary also recorded a negative EBITDA of KES 434.40Mn, bringing it closer to break-even, with management maintaining its March 2027 EBITDA break-even target.
We retain a BUY RECOMMENDATION on Safaricom, with an implied value of KES 43.85 per share, representing a 27.5% upside from the current price of KES 34.40 per share as at 6th November 2026.
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HFCB Group – LONG-TERM BUY
Trading at KES 12.90, HFCB Group has gained 43.0% over the past 6 months, 18.3% over the past year, and 29.0% year-to-date. The stock has traded between KES 8.84 and KES 13.45 over the last 12 months. The Group continues to benefit from its business transformation, with the banking unit delivering strong results.
In its HY2026 results, HF Group reported a 74.2% increase in profit before tax (PBT) to KES 1.22Bn, driven by strong lending, lower funding costs and higher non-funded income. Despite a higher effective tax rate of 18.5%, compared to 11.1% in HY2025, profit after tax (PAT) grew by 59.9% to KES 998.33Mn.
We maintain a BUY recommendation with an implied valuation of KES 14.38, implying an 11.5% upside from its current price of KES 12.90. The sustained earnings turnaround supports expectations of a dividend resumption in March 2027, as earlier alluded to by management.
