Airtel Africa PLC 

Airtel Africa PLC (LSE: AAF) is an FTSE 100-listed provider of telecommunication and mobile money services. The Company has a significant presence in Africa. AAF operates in 14 African countries, primarily in Central Africa, East Africa, and West Africa. AAF was founded in 2018 and is headquartered in London, the United Kingdom. This Report covers the Investment Highlights, Conclusion, and Recommendation on the stock.

Investment Rationale – Sell at GBX 120.10

• Resistance near Current levels: AAF’s stock price crossed the Resistance (R2) which was stated in the previous report on 19 April 2024 and might witness some sell-off from the current levels. Considering the market conditions and the price action, it is prudent to exit the stock, as the prices might pull back from these levels.
• Inefficient Debt Management: During FY24, the company reported a higher Debt/ Equity ratio of 2.07x, when measured against the industry median of 0.81x. Further, the % of long-term Debt to the Total Capital of AAF was 39.6% in FY24, compared to the industry median of 33.2%.
• Declining liquidity ratios: The group’s quick ratio for FY24 was reported at 0.56x, which is lower than the industry median of 0.79x. Further, AAF’s current ratio declined to 0.57x during FY24, against the industry median of 0.82x.

Share Price Chart  

Conclusion

Based on the notional gains, macroeconomic challenges, and price action stance, a "SELL" recommendation on JD Airtel Africa PLC (LSE: AAF) has been given at the current market price of GBX 120.10 (as of 15 May 2024, 08:15 AM GMT+1).

Note 1: Past performance is not a reliable indicator of future performance.

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance level is 15 May 2024. The reference data in this report has been partly sourced from REFINITIV.

Note 3: Investment decisions should be made depending on an individual's appetite for upside potential, risks, holding duration, and any previous holdings. An 'Exit' from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above.

Note 4: Target Price refers to a price level which the stock is expected to reach as per the relative valuation method and/or technical analysis taking into consideration both short-term and long-term scenario.

Note 5: ‘Kalkine reports are prepared based on the stock prices captured either from the London Stock Exchange (LSE) and or REFINITIV. Typically, both sources (LSE and or REFINITIV) may reflect stock prices with a delay which could be a lag of 15-20 minutes. There can be no assurance that future results or events will be consistent with the information provided in the report. The information is subject to change without any prior notice.’

Note 6: Dividend Yield may vary as per the stock price movement.