Atlas Mara Drops to Record Low as Analyst Slashes Profit Targets

  • Renaissance Capital reduces target share price by 27% in note
  • Shares in Robert Diamond’s African finance firm slump 10%

Atlas Mara Ltd., the African finance firm founded by ex-Barclays Plc Chief Executive Officer Robert Diamond, fell to the lowest since its initial public offering in 2013 as an analyst reduced his profit targets amid economic turmoil in Nigeria.

Shares in Atlas Mara fell as much as 10 percent to $3.10 each in London, the lowest since the firm first sold shares to the public almost three years ago. Ilan Stermer, an analyst with Renaissance Capital in Johannesburg, cut his target price on the stock by almost one-third to $4.50 and said the company’s full-year profits will fall by more than half.

Diamond’s firm has been battered by a slump in commodity prices that has dimmed the outlook for the seven African countries in which the company owns assets. In Nigeria, where Atlas Mara owns 30 percent of Union Bank Nigeria Plc, bank stocks have tumbled amid fears over the industry’s strength while the naira today fell to a record low against the dollar.

“We expect Atlas Mara’s full-year profits to be down by more than 50 percent, in large part due to continued forecast weakness in the naira,” wrote Stermer, who kept a buy rating on the shares.

The stock fell for a sixth straight day, the longest losing streak since May. Shares in Atlas Mara have tumbled more than 40 percent so far this year, giving it a market value of about $220 million. The stock is down 72 percent since the IPO.

The company’s profit for the first six months of the year is likely to fall 7 percent to 5 cents a share, Stermer wrote. The bank, incorporated in the British Virgin Islands, is set to report first-half results next week.

— With assistance by Paul Wallace

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