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Investing.com - HSBC has upgraded Airtel Africa (LSE:LON:AAF) stock rating from Hold to Buy, while raising its price target to GBP2.60 from GBP1.90, citing strong growth potential across key African markets.
Airtel Africa’s first quarter fiscal year 2026 revenue grew approximately 48% in Nigeria, though this lagged behind competitor MTN’s roughly 68% growth. HSBC attributes this difference to higher elasticity of usage in Airtel Africa’s customer base, which it expects to fade over time.
The bank forecasts a 19% revenue compound annual growth rate (CAGR) through fiscal year 2027 for Airtel Africa, supported by solid long-term growth potential in Nigeria, Uganda, Tanzania, and the Democratic Republic of Congo. With stable macroeconomic conditions, HSBC expects Airtel Africa to maintain sustained growth.
HSBC notes that Airtel Africa has minimal USD costs in its operating expenses, providing a more stable EBITDA margin outlook compared to peers such as MTN in Nigeria. The bank projects a roughly 25% EBITDA CAGR through fiscal year 2027.
Despite lacking dominant mobile market share in certain African markets, HSBC views Airtel Africa’s business model as one of the best in the industry, citing its strong commercial mindset and quick-to-market approach. The bank forecasts approximately 22% mobile money revenue CAGR through fiscal year 2027 and roughly 19% through fiscal year 2030.
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