Absa Group (ABG.JO)
Financials · JSE · South Africa
Fundamentals
Valuation and ratings
Absa Group trades at R216.56, close to the R225.42 our discounted cash flow model puts on the business. On this measure the market and the model broadly agree, so the interesting question is which of them is wrong.
Our moat model scores it 47 out of 100, which is a moat, but not a deep one. A moat is a structural reason competitors cannot take the profits away, and it matters more to a long holding period than any single quarter's numbers do.
It changes hands at 8.1 times earnings. Be careful reading that in isolation: for a cyclical business a low P/E arrives at the top of the cycle, when profits are peaking and about to fall, which is exactly when the shares look cheapest and are not.
About Absa Group
Absa Group Limited, together with its subsidiaries, provides retail, business, corporate, investment banking, insurance, financial, and wealth management products and services in South Africa and internationally. The company offers life and non-life insurance products; residential property-related finance solutions; mortgages; vehicle and asset finance products and services; cash, debit, credit and prepaid cards; personal loans; corporate, relationship, and transactional banking services; mobile payments; and savings and investment products and services. It also provides insurance and financial advisory, stockbroking and portfolio management, and trust administrative services. In addition, the company offers trade and working capital, cash management, payment, and liquidity products and solutions; and investment banking, private equity and infrastructure investment, and commercial property financing services. Further, it provides broker-dealer trading in debt and equity securities; and solicitation, syndication, selling, and arranging of equity and debt products, as well as financial, leasing, and management services. The company was formerly known as Barclays Africa Group Limited and changed its name to Absa Group Limited in May 2018. Absa Group Limited was incorporated in 1986 and is based in Johannesburg, South Africa.
ABG.JO passes 6 of our 30 screens today
Each screen prints the exact criteria it used, and the circumstances in which it is wrong.
Common questions
Is Absa Group (ABG.JO) undervalued?
Against our discounted cash flow estimate of R225.42, ABG.JO at R216.56 is 4% below fair value. That is one model's answer, not a recommendation, and most of a DCF's output sits in a terminal value nobody can forecast.
What is ABG.JO's P/E ratio?
ABG.JO trades at 8.1 times earnings. A low P/E is not automatically cheap: on a cyclical company it is usually a warning that earnings are at a peak.
The full research page for ABG.JO, with financial statements, ownership detail, peer comparison and alerts, is free inside the app.
Data from company filings, exchange quotes and SEC EDGAR 13F disclosures. Quotes are delayed. Metrics we do not have are left out rather than estimated. Educational information, not financial advice.