BUAFOODS | BUA Foods Plc - Company Update : Strategic growth initiatives to drive long term value

    BUA Foods PLC (NGX: BUAFOODS) delivered a strong 9M'24 performance, with revenue and PAT growing by 104.2% YoY and 90.7% YoY, respectively, driven by a combination of volume growth and strategic price adjustments across its product segments. Building on this solid financial performance and ongoing initiatives to drive volume growth and enhance operational efficiency, we expect BUAFOODS to maintain its positive earnings trajectory into FY'25. Accordingly, we have updated our FY'25 projections, estimating revenue at N1.78 trillion and PAT at N318.95 billion, with corresponding CAGRs of 25.4% and 32.6% over our forecast horizon (FY'25 - FY'29) apiece. 

     

    Valuation and Rating

    Our updated model reflects a 12-month TP of N399.22 and a HOLD recommendation. Despite the stock trading at a premium relative to its historical EV/EBITDA multiple at 19.3x (vs the 2-year average of 17.9x) and P/E multiple at 34.2x (vs the 2-year average of 26.8x), the new TP is supported by the company's outperformance in 9M'24, particularly in comparison to industry peers, and aggressive capacity expansion plans that are expected to drive value.

     

     

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    CardinalStone is a full service investment banking firm with a vision to build a world class investment banking firm of African origin; operating out of Lagos, Nigeria. The firm was incorporated in April 2008 and began operations in June 2008. CardinalStone is duly registered with the Securities & Exchange Commission in Nigeria to carry on business as an Issuing House, Fund Manager and Broker/Dealer The Firm's activities are carried out across five business units: Asset Management, Investment Banking, Private Equity, Securities Trading and the Business Support Group.
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