Stock Recommendations
The stock market has displayed some volatility over the last three weeks, weighed down by profit-taking, cautious sentiment amid higher global and local interest rate outlooks, and interim dividend book closures. As such, we recommend the following stocks for your investing consideration:
DTBK – BUY
Trading at KES 187.25 per share as of 24th September 2026, the Bank’s share price has lost 5.0% month to date (September) while improving 30.2%, 18.6%, and 76.1% in the last 3, 6, and 12 months, respectively. Year to date, the counter has gained 60.8%, further supported by its continued profit growth.
On its half-year financials for 2026 (HY2026), the Group reported a profit before tax (PBT) of KES 9.84Bn, a 37.0% jump from that of KES 7.18 Bn, while its profits after tax (PAT) accelerated up 35.0% year on year (y-y) to KES 7.29Bn in HY2026 from KES 5.37Bn in HY2025. The performance was supported by improved lending, low financing costs, and sustained momentum in non-funded income, despite exiting Burundi by the end of 2025.
The rise in earnings saw DTBK’s earnings per share (EPS) jump 34.1% to KES 45.72 from KES 34.09 in HY2025. Based on this performance, the stock is trading at a P/E ratio of 4.2x, below the industry average of 6.7x, suggesting an undervalued price position. BVPS reached a record KES 410.69 in HY2026, implying a 4.2x P/B ratio, further indicating an undervaluation.
Using a conservative relative valuation approach, we value the counter at KES 259.50 per share, implying a 38.5% upside potential from its current price of KES 187.250 as at 24th September 2026. While the Company offers strong upside potential, liquidity remains a key constraint despite a free float of 72.18%, equivalent to 201.82 million shares. This, however, provides a potential for future issuance of additional shares, which could enhance stock liquidity.
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HF Group – Long-Term Buy
Trading at KES 12.35 per share as of 24th September 2026, HFCB Group has gained 31.7%, 17.6%, and 23.5% over the last 3, 6, and 12 months, respectively. Over the last year, the Bank’s highest and lowest prices were KES 13.45 and KES 8.84 per share, respectively.
The Group continues to leverage its new business model, with the banking unit posting impressive results.
In its HY2026 financials, HF Group reported a 74.2% jump in PBT to KES 1.22Bn from KES 702.65Mn in HY2025, driven by increased lending, lower financing costs, and higher non-funded income. Consequently, total income increased 31.7% to KES 3.80Bn from KES 2.89Bn. Its PAT grew 59.9% to KES 998.33Mn in HY2026 from KES 624.34Mn, despite a higher effective tax rate of 18.5% versus 11.1% of HY2025.
The Group’s earnings per share (EPS) rose 60.0% to KES 1.06 (annualized) from KES 0.66, implying a P/E of 12.41x and a P/B of 1.36x at the current share price of KES 13.15 (30 Aug 2026).
We maintain a BUY recommendation with an implied valuation of KES 14.37, implying a 16.4% upside from KES 12.35 on 24th Sep 2026. The sustained earnings turnaround supports expectations of a dividend resumption in March 2027.
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Safaricom – BUY
Trading at KES 36.35 as of 24th Sept 2026, the Telco giant has gained 11.5%, 26.5%, and 23.9% over the last 3-, 6-, and 12 months while recording highs and lows of KES 39.00 and KES 26.00 per share, respectively. Year-to-date, the Telco has gained 32.1%.
On its full year 2026 (FY2026) financials ending 31st March 2026, Safaricom reported 36.1% to KES 126.82Bn profits before tax (PBT) compared to that of KES 93.21Bn of FY2025. Profits after tax (PAT) were up 61.0% to KES 73.68Bn from KES 45.76Bn reported in the same period. The exceptional performance saw the telco’s dividend jump 66.7% up to KES 2.00 per share in FY2026, up from KES 1.20 in FY2025.
Safaricom’s Ethiopia subsidiary remains on track towards achieving positive earnings before interest, taxes, depreciation, and amortization (EBITDA), with first-quarter (Q1 FY27) revenue rising 66.1% to KES 5.04Bn despite the Birr devaluation. On a constant-currency basis, revenue doubled (+100.3%), which we expect to support its EBITDA break-even by March 2027. We expect the stock to continue rallying toward its 2022 high of 44.95, reached when Safaricom won the Ethiopian telecom license.
In Q1 2027, Safaricom Ethiopia’s 90-day active customers rose to 14.7 million, representing a 46.1% year-on-year rise by the end of June 2026.
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KPLC – BUY
Trading at KES 23.45, the counter’s price has expanded by 37.9%, 39.2%, and 66.9% over the last 3, 6, and 12 months, respectively. Its 12-month high and low prices are KES 24.30 and KES 11.35, and it has gained 14.4% since our last recommendation.
In its FY2026 financial results, KPLC reported a 1.8% rise in PBT to KES 36.01Bn from KES 35.38Bn reported in FY2025, supported by an 8.6% surge in revenue to KES 238.24Bn driven by higher electricity sales.
Net profits rose by 2.1% y-y to KES 24.99Bn in FY2026 from KES 24.47Bn in FY2025, signaling stability in the company’s financial performance, pushing the EPS 2.2% higher to KES 12.81 per share.
Further, KPLC’s financials benefited from lower financing costs of KES 3.08 Bn in FY2026, down from KES 4.72 Bn in FY2025, as the company cut its total borrowings by 8.9% from KES 87.82Bn in FY2025 to KES 79.82Bn in FY2026. Its short-term borrowings below 1 year dropped the most at 39.2% from KES 87.64Bn to KES 79.82Bn.
The company declared a final dividend of KES 1.30 per share, with book closure on 27 Nov 2026 and payment due by 31 Dec 2026. This gives a total dividend of KES 1.50, an 11.7% dividend payout ratio, and a 6.4% dividend yield (2025 dividend was KES 1.00 per share).
We retain a BUY recommendation on the counter, with a target price of KES 31.00 per share, implying a 32.1% upside from the current price of KES 23.45 as of 24th September 2026.
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NSE Plc – BUY
Trading at KES 29.60 per share as of 24th September 2026, the counter has gained 52.9%, 42.7%, and 114.3% over the last 3, 6, and 12 months, strongly supported by improved financial performance in 2025 and 2026. Year to date, NSE plc has gained 44.8%.
We view there is still upside potential on the counter, given the ongoing performance so far in 2026.
In the first half of 2026 (HY2026), NSE plc reported a 396.0% jump in PBT to KES 1,006.34 M from KES 202.91 M in HY2026, strongly supported by increased market transactions (both equities and bond trading), new listings, and acquisition transactions. This saw net profits accelerate 386.1% from KES 151.58Mn in HY2025 to KES 736.87Mn in HY2026. This pushed the EPS 386.2% up from KES 0.58 in HY2025 to KES 2.82 (annualized to KES 5.64 per share).
With more major market transactions in the second half of 2026 (H2-2026), including the Absa Group’s tender offer to acquire Absa Kenya, Nedbank’s acquisition of NCBA Group, and the upcoming listing of Quickmart supermarket, we expect the NSE plc to continue generating higher income.
As such, we project NSE Plc’s FY2026 EPS to exceed KES 5.00, supporting a dividend above KES 3.00 per share, in line with its long-standing payout ratio of at least 70%. In FY2025, NSE plc paid a KES 1.00 special and final dividend, a 96.2% dividend payout ratio from an EPS of KES 1.04. We therefore issue a BUY recommendation on the counter, with a target price of KES 35.50, representing 18.9% upside from the current price of KES 29.85 per share as of 24 Sept 2026.
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Kengen – SELL
KenGen, trading at KES 10.85, has gained 12.8%, 16.2%, and 20.6% over 3, 6, and 12 months, respectively, within a KES 8.02 to KES 12.60 range. However, the stock declined 13.6% after announcing a lower FY2026 final dividend of KES 0.75 versus KES 0.90 in FY2025, despite marginal growth in revenue and profit.
Kengen’s PBT declined by 2.7% to KES 15.05Bn in FY2026 from KES 15.47Bn in FY2025, weighed down by higher reimbursable expenses, particularly fuel and water costs, and lower finance income, despite revenue growing 6.4% to KES 59.72Bn from KES 56.10Bn.
Ahead of FY2026 results, KenGen rallied from KES 8.02 to KES 12.60 on optimism over earnings. Following the strong run-up, we recommend a SELL to lock in gains, as the lower dividend payout of 47.8% and low dividend yield may limit further upside. Rising fuel costs also remain a key risk until global prices stabilize.
Early profit-taking is expected to present opportunities to re-enter the counter at lower prices, particularly once the market has fully priced in the lower dividend payout or after the book closure date of 29 October 2026, ahead of the scheduled payment on 21 January 2027.
