In this report, we update our 12-month target price (TP) for Transnational Corporation Plc in line with our expectations for the power and hospitality businesses. For the former, the company's strategic positioning in power generation (7.0% of Nigeria's installed grid capacity and 10.0% of total output), export opportunity to other West African countries, and strategic alliances with DISCOs, eligible customers, and state governments are likely to be supportive in the near to medium term. See more here.
On the latter, a steady rise in average daily rate (ADR) and improved occupancy rate should cascade into significant revenue accretion for the hospitality business.
The adoption of valuation by parts methodology on the constituent segments above resulted in a 12-month TP of N32.59 and an unchanged BUY recommendation on the stock.
