NB | Nigerian Breweries Company Update - Improved capacity to transfer cost burden a game-changer

    Aided by its improved ability to deal with global cost shocks, NB reported its best first-quarter earnings growth in 18 years in Q1’22. NB's recent traction and that of its peer (GUINNESS) have re-ignited optimism over the brewery sector outlook for 2022 and provoked revisions to our estimates. The net impact of these revisions increased our 12-month Target Price (TP) for NB to N67.14 (vs N52.60 previously). The new TP also suggests a potential total return of 24.6% (17.6% in capital appreciation and 7.0% in dividend yield) over the next 1 year and an upgrade to a “BUY” rating on the counter.

    We highlight the major drivers of our forecast revisions in the points below.

     

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    CardinalStone Research
    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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