By Peet Serfontein & Khumbulani Kunene
Naspers is a prominent multinational media group which has, over the last two decades, evolved from a traditional print media business in one country to a broad-based e-media company in multiple markets. Naspers' most notable investment is Prosus, which in turn has a large shareholding (~24.6%) in Chinese internet giant, Tencent. Prosus is focused on eCommerce, Food Delivery, and Classifieds.
Technically, the price appears to be on Wwave 5 of the Elliott wave price analysis (see the insert on the main chart). In the Elliott Wave analysis, Wave 5 is typically the final upward impulse in a five-wave cycle and strongly supports a bullish tone. As Wave 5 progresses, especially in the early stages, it can attract more buyers who view the breakout above previous highs (set by Wave 3) as confirmation of further upside potential. This increased buying interest supports the ongoing bullish movement and can push prices even higher.
The stock is also trading in a markup phase of the Wyckoff price cycle, characterised by growing market interest and strong buying pressure (volume). This supports our bullish stance.
According to the RSI (Relative Strength Index), the stock will be overbought at ~R4 580. This classifies our profit target of R4 156 as realistic. We suggest medium capital at-risk allocation to this trade.
Expect moderate volatility in the price.
Share Information
| Share Code | NPN |
|---|---|
| Industry | Consumer Discretionary |
| Market Capital (ZAR) | 660.82 billion |
| One Year Total Return | 16.90% |
| Return Year-to-Date | 16.19% |
| Current Price (ZAR) | 3 634.43 |
| 52 Week High (ZAR) | 4 084.54 |
| 52 Week Low (ZAR) | 2 673.30 |
| Financial Year End | March |
| The share price has experienced strong growth so far this year, and several technical indicators guide for further upside potential. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 11.48 | 17.72 | 22.43 | 26.20 |
| Growth (%) | 54.39 | 26.53 | 16.83 | |
| Dividend Per Share (USD) | 0.00 | 1.22 | 1.73 | 2.41 |
| Growth (%) | - | 41.33 | 39.55 | |
| Forward PE (times) | 11.79 | 9.32 | 7.98 | |
| Forward Dividend Yield (%) | 0.58 | 0.83 | 1.15 | |
| Strong earnings growth over the near term is expected to taper off but remains good, nonetheless. | ||||
Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | WHL - BUY (Continue to hold) | TBS - BUY (Continue to hold) | OMU - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 60.82 | 224.91 | 12.48 |
| Current | 66.67 | 242.02 | 12.95 |
| Movement | +9.6% | +7.6% | +3.8% |
|
A price that appears to be building a base remains of interest. Remains just above its 200-day simple moving average. Upside momentum regained some strength, supporting the trade strategy.
Our profit target is R71 with a trailing stop-loss level at R62.50. Exit the trade on 25 November 2024. |
A price at major resistance is of interest. Remains above its 200-day simple moving average. Upside momentum is somewhat muted, but still supportive of our trade strategy.
Our profit target is at R260, with a trailing stop-loss at R217.20. Exit the trade on 28 April 2025. |
A price action that is building a price base remains of interest. Remains above its 200-day simple moving average. Upside momentum is encouraging.
Our profit target is R14.40 with a trailing stop-loss at R12.80. Exit trade on 17 December 2024. |
| Share Name and position | SHP - BUY (Continue to hold) | DCP - Time to exit (Close the Position) | MNP - Stop Loss (Close the Position) |
|---|---|---|---|
| Entry | 292.78 | 34.52 | 342.53 |
| Current | 300.27 | 37.03 | 323.16 |
| Movement | +2.6% | +7.3% | -5.7% |
|
A share that appears to be in a phase of low volatility remains of interest. Remains above its 200-day simple moving average. Fading upside momentum continues to be a concern
Our profit target is R317 with a trailing stop-loss at R272. Exit the trade on 1 September 2025. | The trade has reached our recommended exit date of 23 September 2024. | The share performance has been disappointing and has triggered a stop-loss, leading us to close the position. |
