Stock recommendations
Equities continue to reap from the stellar performance recorded in the half year 2025 and from the ongoing financials announcements for Q3-2025 by largely the banking sector among others. This is even as investors anticipate for higher returns as most companies have already signaled for better full year results. This is majorly supported by interest cuts that have propelled private sector activities which greatly contributes to disposable income for investments and overall gross domestic product for the economy. The available high returns from companies continue to attract investors into the equity market as returns in other asset classes shrink on impact from rate cuts. The above being put into consideration, we propose the following stocks for your investment considerations:
Safaricom – LONG-TERM BUY:
Trading at KES 29.80 as of 21st November 2025, the counter has gained 9.0%, 50.8% and 72.7% in the last 3-months, last 6-months and the last one year, strongly supported by its improved financials and improved prospects for Safaricom Ethiopia break-even.
On its half year 2026 (HY2026) financials, Safaricom Group reported a 63.1% surge in its profit before tax (PBT) from KES 33.86Bn to KES 55.24Bn supported by the 8.1% growth in its total revenue from KES 189.42Bn in HY2025 to KES 204.71Bn in HY2026 and reductions in Safaricom Ethiopia losses as it progresses to the projected break-even anticipated for FY2027.
Safaricom Kenya reported a 17.9% jump in PBT to KES 84.14Bn in HY2026 from KES 71.265Bn, strongly supported by mobile data and m-pesa revenues.
Safaricom Ethiopia reported a 34.4% improvement in loss before interest and taxes (EBIT) from KES 35.28Bn to KES 24.28Bn supported by a 136.0% rise in service revenue to KES 6.19Bn. This saw Safaricom Ethiopia loss before tax improve (LBT) 23.1% to KES 28.66Bn LBT. As such, loss after tax declined by 22.7% to KES 29.02Bn.
Safaricom Ethiopia active subscribers continue improving to hit 11.15 million (Mn) active customers over 90-day cycle up from 10.1Mn in June 2025 and 6.1Mn 90-day active customers reported by end of September 2024. Overall Safaricom Group customers jumped 11.1% up y-y to 51.1Mn.
As such, retain our BUY recommendation on the stock with a fair value of KES 36.00 per share, a 21.2% upside from the current price of KES 29.70. This will further be supported by a projected total dividend of above KES 1.20, giving a total return of above 25.3%.
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HF Group – Long-term BUY:
We recommend a BUY at the current pricing KES 10.35 per share with an implied value of KES 15.54 per share, an upside of 48.0%. The Group’s 12-month high and low prices stand at KES 11.00 per share as at September 2025 and KES 3.90 on 22nd November 2024, respectively. Its 1- and 3-months average price stands at KES 10.54 and KES 10.38, respectively.
On its half year financials, the Group exhibited a 148.3% growth in PBT to KES 702.65Mn attributed by the capital injection as well as a change of business model from a mortgage only bank to include retail banking.
The Group turned to profitability in 2022 after a capital injection of KES 1 billion in 2021 by Britam Holdings in 2022 to support its transformation to a full-service bank. The Group is expected to perform even better with the additional KES 6.38Bn capital raised in late 2024 from an oversubscribed rights issue. This was in an aim to improve capital ratios as well as expand the business to retail lending. Further, its recent return to tier 2 status by CBK opens up more avenues for growth through increased customer trust and retention which will in return grow its customer deposits.
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Britam – Long-term BUY:
Trading at KES 8.70 per share, the counter continues to command the largest market share in the region, especially in life insurance and deposit administration. The two revenue lines, life insurance and deposit administration, command 22.4% and 32.4% of the insurance industry revenue.
Britam’s HY2025 financials recorded a 10.7% decline in PBT to KES 2.51Bn from that of KES 2.81Bn for HY2024. In spite of the decline, the company remains very profitable with commendable growths being recorded since 2022, immediately after the covid-19 pandemic.
As Bank affiliated insurances and agencies continue to post stellar and double-digit growths in profitability, we expect the same to reflect in Britam among other listed similar counters.
As the company pursues new products such as the new “pilot loss of license cover” and as the insurance business penetrates the market, we expect the insurer to improve its return on investment and retain a BUY recommendation with a target price of above KES 10.00, an over 14.9% capital gain plus dividends. This will further be boosted by its expansion and plans to enter the Democratic Republic of Congo through an acquisition. All of these factors justify our recommendation.
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I&M Group – BUY:
Trading at KES 45.90 per share as of 21st November 2025, the counter has gained 8.5% from our last buy recommendation when it was trading at KES 42.30 per share against a fair value of KES 48.42 per share.
The price surge is attributed to the company’s expanding financials and overall growth in return on investments. This is supported by its ambitious strategy of local and regional expansion, digital transformation and new growth initiatives backed by its KES 4.19Bn capital injection completed 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 penetrate the local retail market which has proved key for Kenya’s banking sector.
On its Q3-2025 financials reported on 20th November 2025, I&M Group PBT jumped 25.8% up to KES 17.75Bn as at Q3-2025 from that of KES 14.11Bn reported in Q3-2024. The performance was supported by lower cost of financing and higher non -funded income plus a stable interest income.
This saw the Bank’s net profits soar 27.4% to KES 12,68Bn as of Q3-2025, to push its earnings per share (EPS) 24.2% up to 6.88 annualized to 9.17 per share. This prompted a 15.4% rise on its interim dividend per share to KES 1.50 whose book closure and payment dates are set for 15th December 2025 and 14th January 2026.
Going by the Group’s historical dividend payout, we expect an additional final dividend of KES 3.00 per share for a total of KES 4.50 for FY2025, resulting in a dividend yield of 9.8% return. This gives a total return of 15.3% and therefore retaining our BUY recommendation on the stock.
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KCB Group – SELL:
Trading at KES 64.25 per share as of 21st November 2025, the largest Bank by assets, has lost 1.2% from its price on the reporting day while gaining 9.4%, 19.5%, 37.0% and 60.8% in the last 1-, 3-, 6- and 12-months. Its average price for the last 1-, 3-, 6- and 12-months stands at 44.82, KES 42.87, KES 39.36 and KES 36.33 per share, respectively.
On its Q3-2025 financials, the Group posted KES 62.08Bn profits before tax (PBT) for the first nine months of 2025, 8.1% higher in relation to KES 57.43Bn reported as of Q3-2024. Its PAT rose 3.4% to KES 47.32Bn in Q3-2025 to marginally push its EPS 0.7% up to 19.12 in Q3-2025.
We issue a SELL recommendation on the counter’s share price after retaining its fair value at KES 60.06, representing a 6.5% downside from the current price of KES 64.25 as of 21st November 2025. This is to gain on the capital gains already earned of above 7.6% plus a dividend yield of above 7.0% (above 14.6% total return) for investors who entered the stock at a price of below KES 57.00 per share after the interim dividend book closure that happened on 3rd September 2025. The Group’s interim dividend was paid on 11th November 2025.
