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.
