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.