FNB top 5 South African stock picks for 2025
FNB shared their top five local stock picks for 2025: Naspers, Sun International, Foschini Group, Coronation, and Bidcorp.
“Last year was a strong year in global equity markets, with the perennially underperforming JSE also delivering a decent showing,” said Chantal Marx, Head of Investment Research at FNB Wealth and Investments.
The S&P 500 had an excellent year, driven by the continued growth of AI, which boosted technology stocks and solidified the “Magnificent Seven” as the clear leaders in the AI space, Marx explained.
The Chinese market showed some improvement, although uncertainty around the country’s economic challenges and slow government response to stimulate growth persisted.
“South Africa company valuations are less attractive this year relative to the start of last year, although we still see upside in certain sections of the SA Inc basket and, notably, the rand hedge counters seem to offer very good value,” Marx said.
“While there is still very strong thematic thrust behind the US-based technology stocks, these companies now look expensive, and this has prompted us to look for better value elsewhere.”
The market has adjusted expectations for US Federal Reserve interest rate cuts, with only two 0.25% reductions now expected. This shallower-than-anticipated rate-cutting cycle could negatively impact risk assets.
Additionally, the US dollar is expected to remain strong due to President Trump’s policies, which, along with potential disruptions to global trade, may further hurt emerging markets.
“As such, we enter the year with some trepidation around overall market returns and believe that this could be a good year for ‘stock pickers’,” Marx added.
In 2024, FNB’s stock picks delivered 29.5% on a total return basis in rands (measured from the day of publication, 22 January).
“Our best performers were Nvidia (+117.4%), African Rainbow Capital (+95.8%) and KAL Group (+31.9%). Our worst picks were CVS (-35.2%), Bidcorp (-1.9%) and Cybersecurity ETF BUG (+5.0%).”
Below are FNB’s top five local stock picks for 2025.
Naspers (NPN)/ Prosus (PRX)

Market cap: R694.16 billion
Naspers is a global media and tech company, best known for its stake in Prosus, which owns about 26% of Tencent, the Chinese internet giant behind WeChat, gaming, and cloud services.
Prosus is Naspers’ international arm, investing in e-commerce, food delivery, fintech, and classifieds, with major holdings in Delivery Hero, Swiggy, Udemy, OLX, and PayU.
Despite regulatory risks and economic challenges in China, Tencent’s fintech, cloud computing, AI, and advertising businesses remain strong growth drivers.
Prosus’ recent investments in Indian payments and Latin American travel could further boost growth and diversification.
The group has a history of strong financial performance, with e-commerce turning profitable and food delivery now making a meaningful contribution.
The management team has a solid track record and is working to reduce the stock’s discount to its underlying assets.
Recent US government scrutiny of Tencent has pressured share prices, but the blacklist does not affect Tencent’s operations.
Despite short-term uncertainty, FNB sees significant upside in Naspers and Prosus, expecting a recovery in Tencent, stronger profits across investments, and ongoing share buybacks to drive future gains.

Sun International (SUI)

Market cap: R10.51 billion
Sun International is a leading player in gaming and hospitality, owning luxury hotels, resorts, and casinos across South Africa, Zambia, Botswana, Namibia, Lesotho, Nigeria, and Eswatini.
It’s best known for Sun City and major casinos like Time Square, GrandWest, Carnival City, and Wild Coast Sun.
Post-COVID streamlining efforts are paying off, and the company stands to gain from the rebound in international travel and local tourism, which is still recovering to pre-pandemic levels.
Travel and tourism contributed ~7% to South Africa’s GDP pre-COVID and is expected to grow at 5.9% annually through 2029.
The company has two key revenue streams:
- Casinos (~55% of revenue), which are recovering but face competition from online betting.
- SunBet (~10% of revenue), their online gaming platform, which is growing rapidly and expected to become a bigger part of the business.
A major development is Sun International’s R3.2 billion acquisition of Peermont Holdings, which owns significant gaming and hospitality assets.
While regulatory approval is still pending, the deal could bring scale and synergy benefits. If blocked, Sun International will have strong cash reserves, potentially leading to higher shareholder returns.
With a 12-month forward P/E of ~9x, FNB sees solid near-term growth potential and views the current share price as an attractive entry point.

The Foschini Group (TFG)

Market cap: R47.50 billion
TFG is a leading retail and financial services group with a diverse brand portfolio, including Foschini, @Home, Totalsports, Jet, Sterns, and Sportscene in South Africa, as well as Phase Eight and Whistles in the UK and RAG in Australia.
Despite pressure on consumer spending, the company has maintained strong revenue growth, driven by brand expansion and increasing online sales through its Bash platform. Its loyalty program, with 38.8 million members, continues to support customer retention.
Looking ahead, TFG is well-positioned to benefit from an improving macroeconomic environment.
Lower inflation and interest rate cuts should boost disposable income and credit accessibility, driving consumer spending.
The company’s quick-response local manufacturing gives it a competitive advantage, allowing it to meet demand efficiently.
Additionally, credit demand is rising, with store credit applications increasing 11.7% quarter-over-quarter and 18.9% year-over-year, which signals the potential for higher sales.
Strong cash flow and lower finance costs are also helping TFG reduce debt, particularly from its 2022 Tapestry acquisition.
Currently, TFG is trading at a forward P/E of 12.9x, a 6% discount to its sector average. Given its strategic growth initiatives, disciplined credit management, and strong market position, FNB sees it as an attractive long-term investment.

Coronation Fund Managers (CML)

Market cap: R14.3 billion
Coronation is one of South Africa’s largest independent asset managers, holding around 12% market share.
The firm manages equity, fixed-income, and balanced mutual funds, serving a diverse range of clients including pension funds, medical schemes, unit trusts, banks, and international retirement funds.
Coronation uses a bottom-up stock-picking approach and invests globally in public equity and fixed-income markets.
The company has a strong reputation built over years of successful strategy execution and consistent cash generation.
It enjoys economies of scale due to its relatively low fixed-cost base and offers an attractive dividend yield.
The recent resolution of a tax matter with SARS not only provided a special dividend but also clarified regulatory concerns, setting a legal precedent for other asset managers.
Although the introduction of a new two-pot system in retirement savings presents a short-term challenge with expected withdrawals of R50 billion to R100 billion, this impact is likely to be small relative to Coronation’s total assets under management (AUM). Over the long term, this should stabilize as consumers access savings more gradually.
FNB sees potential for a 30% upside in Coronation’s stock, driven by an anticipated improvement in market conditions, earnings growth, and AUM expansion.
Currently, Coronation is trading at a 2.2% price-to-AUM (P/AUM), below its historical average of 3.0%, and offers a dividend yield of around 11.1%.

Bidcorp (BID)

Market cap: R157.47 billion
Bidcorp is a leading global food service distributor, operating across multiple regions including the UK, Europe, Middle East, South America, Asia-Pacific, and South Africa.
The company’s diverse portfolio spans various food and ingredient manufacturing sectors such as catering, hospitality, meat, poultry, seafood, and baked products.
Bidcorp’s strategy focuses on organic growth in established regions and acquisitive expansion in new ones, with further opportunities in customer mix improvements and value-added offerings.
With a well-diversified client base across both developed and emerging markets, Bidcorp is not overly reliant on any specific client or sector.
The company’s dual strategy of organic and acquisitive growth helps spread risk, and its strong balance sheet leaves room for bolt-on acquisitions in both geographical expansion and product development.
Despite a subdued consumer demand due to the ongoing cost-of-living crisis, Bidcorp has continued to perform strongly, reporting record growth in its recent four-month update (ending October 2024).
Margins have held up well, even as other companies sacrificed margins to drive sales. The company remains financially robust, with low levels of debt and a solid, diversified business model.
Management continues to adapt quickly to market conditions while maintaining excellent service levels.
Bidcorp is currently trading at a forward P/E of 16.9 times, below its long-term average of 20, which presents a favourable long-term investment opportunity.

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