In its 9M'23/24 results, Guinness Nigeria Plc (GUINNESS) recorded a 27.2% YoY revenue growth and a pre-tax loss of N60.4 billion. Although the company has maintained a strong top line despite the challenging macroeconomic conditions, foreign exchange losses continue to pressure its bottom line. Nevertheless, we update our Target Price (TP) to N85.69 per share (vs N73.56 previously) and maintain a BUY rating as the company continues to optimise revenue growth through a margin-accretive selective portfolio play. In addition, we like GUINNESS' relatively effective management of foreign exchange exposures via increased local inputs sourcing and FX debt repayments.
The potential synergies from the plan to transfer Diageo's majority stake to Tolaram group are also likely to expand addressable markets and shore up the top line.
