Stock recommendations
A better economic outlook continues to favor equities investing supported by stellar earnings projected for full year 2025 (FY2025) as evidenced by the half year financials reported in August 2025. This is further supported by the ongoing interest rate cuts geared towards boosting private sector economic activities which account for over 50% of the local gross domestic product. As interest rates narrow down, investors continue to position themselves in other high returning assets including the equities market.
In respect to these developments, we have identified the following stocks for your investing considerations:
I&M Group – BUY
Trading at KES 42.30 per share as of 22nd October 2025, the Bank’s price has attracted 16.5%, 40.3% and 62.2% gains in the last 3-, 6-, and 12-months. Its average price for the last 3-, 6- and 12-months stands at KES 40.12, KES 36.95 and KES 34.83 per share, respectively.
The price surge is attributed to the company’s growing financials and overall growth in the investors’ returns. This is supported by its ambitious strategy of 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 half year 2025 (HY2025) financials, I&M Group reported a 34.1% rise in its profits before tax (PBT) to KES 11.71Bn partly supported by some early gains from the ongoing retail banking penetration. The company’s overall financials have maintained an uptrend with 2022, 2023 and 2024 recording earnings per share (EPS) of KES 6.77, KES 7.63 and KES 9.30 while issuing dividends of KES 2.55, KES 2.55 and KES 3.00, respectively. HY2025 EPS stood at 4.51 annualized to 9.02.
We therefore expect expansions in the Group’s return on investments while retaining its fair value at KES 48.42, a 15.0% upside, and therefore retain our BUY recommendation.
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HF Group – Long-term BUY
Trading at KES 10.15 per share as of 22nd October 2025, the Group’s price has stabilized at an average of KES 10.37 and KES 10.44 per share in the last 2 months and 1-month, respectively. We value the Group at KES 15.54, a 51.3% upside from the current price, purely based on its current enterprise value.
The price surge is largely on its transition from loss making to profit making entity backed by capital injections. This all started in 2022 when its major shareholder, Britam Holdings plc, injected KES 1 billion. In late 2024, HF Group secured an additional KES 6.38Bn following an oversubscribed rights issue geared towards boosting its capital ratios and business expansion to retail lending.
By end of HY2025, HF Group’s PBT jumped 148.3% to KES 702.65Mn up from KES 282.96Mn reported in HY2024, signaling the impact of this capital boost. This follows a change in business model from a mortgage bank only to retail banking which is key in Kenya’s banking sector. The growth is expected to fuel a price surge as investors’ returns are also forecasted to flourish.
According to the management, the company is expected to resume dividend payments as from March 2027 for FY2026 financials.
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Britam – Long-term BUY
Trading at KES 8.56 per share as of 22 2025, the risk insuring counter continue to command the largest market share in the region, especially in life insurance and deposit administration. The two revenue lines, life insurance & deposit administration, command 22.4% land and 32.4% of the industry’s revenues.
In its HY2025 financials, Britam recorded a 10.7% decline in PBT from KES 2.81Bn to KES 2.51Bn after a persistent and significant growth since 2022. We expect the company to resume dividend payout in FY2025, after some years of non-payment. Britam plans to enter the democratic republic of Congo through an acquisition riding on its regional expansion strategy. A
s the insurance business continues to gain traction in the region, we expect Britam’s returns to soar high and rally the price upwards to pre-covid levels. As such we issue a BUY recommendation with a price target of above KES 10.00 in the next 6- to 12-months.
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Safaricom – LONG-TERM BUY
We recommend an entry at the current price of KES 27.95 per share as of 22nd October 2025, with a price target of KES 36.00. The counter’s price has been quite volatile on impact from global investment volatilities.
Our recommendation is strongly backed by Safaricom Ethiopia subsidiary developments whose three-month active subscribers hit 10.1 million in June 2025. This is further supported by its local unit performance which recorded 11.6% jump in PBT for FY-2024. In FY2026 we expect Safaricom Kenya to retain double digit growths as Safaricom Ethiopia fares towards break-even in March 2027.
On its financials for the year ending 31st March 2025, Safaricom plc reported a 10.1% rise in profits before tax from KES 84.69BN in FY2024 to KES 93.21Bn in FY2025, supported by an 11.2% rise in total revenues from KES 349.45Bn to KES 388.69Bn. Its half year 2026 (HY2026) is schedule to be released on 6th November 2025, where we anticipate a near double digit growth.
We also expect the management to review upwards its dividend payout from the current 69% to its policy requirement of at least 80% of its earnings per share boosted by Safaricom Ethiopia.
