This archive report was first published on 20 August 2019.
On August 20, 2019, Citi Research revised their target price for Safaricom stock from KSh28.8 per share to KSh30.1 per share, driven by their positive outlook on M-Pesa's growth prospects.
M-Pesa, a leading mobile money transfer service, has been expanding its reach through partnerships with global money transfer services such as Pay Pal, AliExpress, and WeChat. This strategic move has paid off, with M-Pesa handling a third of all diaspora remittances into Kenya in the last financial year.
According to available data, the percentage of remittances sent through the Safaricom platform increased from 15 percent in 2017 to 34 percent in 2019, indicating a significant growth in the service's popularity.
As M-Pesa continues to expand its reach in Africa, analysts expect increasing trade within the East African region to contribute to the service's growth.
However, despite the expected growth in M-Pesa, Citi Research remains concerned about governance matters at Safaricom, citing the company's failure to name a successor for its late CEO, Bob Collymore. As a result, analysts at Citi are neutral on the Safaricom stock.
