By Peet Serfontein & Zimele Mbanjwa
Absa Group is one of South Africa's largest financial services groups offering a complete range of banking, assurance and wealth management products and services. Absa has a presence in 16 countries across the African continent and as at end December 2024, Absa had a market share of assets in South Africa of ~20%, with 1 016 outlets, 12.7 million customers and 4.6 million digitally active customers.
Technically, a peer comparison of South African banking and financial shares based on price momentum, oversold/overbought levels, and trend direction, shows that Absa presents a balanced technical profile with moderate momentum and a relatively neutral positioning on the oversold/overbought scale (see insert on the main chart). This suggests that the share price may be consolidating and could be poised for a potential upward shift should sentiment improve. Ultimately, Absa's steadier placement relative to its peers may offer a more favourable risk-adjusted entry point.
The share is also showing strong price support around current levels, which also supports a bullish bias.
The price action remains below its 200-day simple moving average (SMA) of ~ R175.78.
Fading downside price momentum, according to the Moving Average Convergence Divergence (MACD) histogram and the sideways trajectory according to the On-balance volume (OBV), both support our bullish view.
The price action remains below its 200-day simple moving average (SMA) of ~ R175.78.
| Share Information | |
|---|---|
| Share Code | ABG |
| Industry | Banks |
| Market Capital (ZAR) | 153.12 billion |
| One Year Total Return | 26.95% |
| Return Year-to-Date | -5.58% |
| Current Price (ZAR) | 171.20 |
| 52 Week High (ZAR) | 200.70 |
| 52 Week Low (ZAR) | 144.52 |
| Financial Year End | December |
| Year-to-date performance provides a decent entry point. | |
| Consensus Expectations (Bloomberg) | ||||
|---|---|---|---|---|
| FY24 | FY25E | FY26E | FY27E | |
| Headline Earnings per Share (ZAR) | 26.58 | 28.94 | 31.67 | 34.33 |
| Growth (%) | 8.89 | 9.45 | 8.39 | |
| Dividend Per Share (ZAR) | 14.60 | 15.93 | 17.45 | 18.93 |
| Growth (%) | 9.10 | 9.57 | 8.44 | |
| Forward PE (times) | 5.92 | 5.41 | 4.99 | |
| Forward Dividend Yield (%) | 9.30 | 10.19 | 11.05 | |
| Earnings growth is expected to be solid over the forecast horizon. The dividend yield is very attractive. | ||||
Buy/Sell Rationale:
Technical Analysis:
Fundamental view
| Share Name and Position | CLS - Take Profit (Close the Trade) |
REM - Take Profit (Close the Trade) |
GRT - BUY (Continue to hold) |
MRP - BUY (Continue to hold) |
|---|---|---|---|---|
| Entry | 356.38 | 145.56 | 13.22 | 219.84 |
| Current | 399.80 | 161.53 | 13.29 | 241.08 |
| Movement | +12.2% | +11% | +0.5% | +9.7% |
| The share reached our target price, so we took profit and closed the position. | The share has rallied, and we suggest taking an early profit to protect gains. |
The price is trading at one of the highest price bins out of the price distribution analysis, which remains of interest. The share is testing its 200-day SMA. The start of upside momentum supports the trade strategy.
We maintain our profit target at R16.00 with a trailing stop-loss at R12.00. Exit the trade around 17 November 2025. |
The price is trading at the start of wave 5 out of the Elliott wave price theory, which remains of interest. The share remains below its 200-day SMA. Fading downside momentum supports the trade strategy.
We maintain our profit target at R267 with a trailing stop-loss at R222. Exit the trade around 17 November 2025. |
FNB Stockbroking and Portfolio Management (Pty) Ltd, a subsidiary of FirstRand Bank Limited, an authorised Financial Services Provider and authorised user of the JSE limited (Reg no: 1996/011732/07). This Publication note is issued by FNB Stockbroking and Portfolio Management (Pty) Ltd for the information of clients only and should not be produced in whole or part without prior permission. Although FNB Stockbroking and Portfolio Management (Pty) Ltd is an Authorised Financial Services Provider, any opinions and/or analysis contained in this Publication are for informational purposes only and should not be considered advice, including but not limited to financial, legal or tax advice, or a recommendation to invest in any security or to adopt any investment strategy. The information contained herein has been obtained from sources/persons which we believe to be reliable but is not guaranteed for correctness, completeness or otherwise and we do not assume liability for loss arising from errors in the information or that may be suffered from using or relying on the information contained herein irrespective of whether there has been any negligence by us, our affiliates or any other employees of us, and whether such losses be direct or consequential. As market and economic conditions are subject to rapid change, any comments, opinions, and analysis is rendered as of the date of publishing and may change without notice. Such changes may have a material impact on the outcome of any investment. Securities involve a degree of risk and are volatile instruments. Past performance is not indicative of future performances. Securities or financial instruments mentioned in the Publication note may not be suitable for all investors and FNB Stockbroking and Portfolio Management (Pty) Ltd has bares no responsibility whatsoever arising from or as a consequence hereof. The material is not intended as a complete analysis of every material fact regarding any share, instrument, sector, region, market, country, investment, or strategy. The recipient of this Publication must make their own investment decision and is advised to contact his relationship manager for a personal financial analysis prior to making any investment decisions. Copyright 2018 by FNB Stockbroking and Portfolio Management (Pty) Ltd.
