Our projection for Safaricom FY2026 PAT is KES 90B, a +28.9% increase from KES 69.8B in FY2025. Expected FY2026 EPS stands at KES 2.25. A dividend payout ratio of 80% implies total FY2026 dividend of KES 1.80 (Interim dividend KES 0.85 and Final dividend KES 0.95). That translates to a dividend yield of 6% at the current price of KES 29.70. The average P/E of Safaricom over the past five years stands at 14.9x. Scenario 1: FY2026 PAT: KES 90B FY2026 EPS: KES 2.25 FY2026 DPS: KES 1.80 Dividend yield: 6% Dividend Payout Ratio: 80% If you apply a conservative re-rating of 17x to expected FY2026 EPS of KES 2.25 it implies a price of KES 38.25. At 38.25 level, Safaricom's yield will rebase to 4.7%. Scenario 2: FY2026 PAT: KES 85B FY2026 EPS: KES 2.12 FY2026 DPS: KES 1.70 Dividend yield: 5.7% Dividend Payout Ratio: 80% Kindly note that dividend yield is based on the current price of KES 29.70. If you apply a conservative re-rating of 17x to expected FY2026 EPS of KES 2.12 it implies a price of KES 36.04. At 36 level, Safaricom's yield will rebase to 4.7%. In conclusion, Scenario 2 is more likely. But we don't completely rule out Scenario 1. Our valuation view: Based on these projected FY2026 results, our fair value estimate for SCOM lies between 36- 38.25 range. We expect SCOM to re-rate upwards toward the 36 level supported by stronger FY2026 earnings and higher dividend payout. At 28 or lower, Safaricom presents an attractive entry point, with a potential upside of over 28.6% toward the 36 level. Total Return 34.3% (Dividend yield of 5.7% + Capital gains of 28.6%). To receive such detailed stock analysis, join our private investors' community today. I charge an annual fee of KES 6,000 only for unlimited consultations throughout 2026. Visit our website: encapkenya.com Follow us at @EncapKenya
