In line with our FY'24 forecast, Total Energies Marketing Nigeria Plc (TOTAL) reported a net income of N20.6 billion (+53.2% YoY) in its unaudited H1'24 financials. Going into H2'24, we expect sustained revenue growth due to the elevated prices of petroleum products and the strong demand across core product segments as the company continues to leverage its strong network infrastructure (sales to service stations).
In addition, following President Bola Tinubu's directive to the Nigerian National Petroleum Company Limited (NNPCL) to sell crude oil to Dangote Refinery and other upcoming refineries in Naira, we envisage an increase in product supply, improvement in cost profile, and a subsequent rise in margins for TOTAL. Hence, we have made adjustments to our forecasts and obtained a new 12-month target price (TP) of N587.50 (vs N537.32 previously). We retain a BUY recommendation on the ticker.
