Analysts See 37% Upside in MTN Nigeria on New Target Price
Investment firm, CardinalStone Securities Limited, has projected 37% upside for MTN Nigeria Plc as analysts revised the telecom company target price to N336.60. Data from the Nigerian Exchange showed that Ticker: MTNN closed at N245 amidst rising block trade and offshore investors interest in the telecom stocks.
“We revise our 12-month target price to N336.60 per share, up from N301.49 previously, reflecting a 37.4% potential upside from its current ref price and an unchanged BUY recommendation”, CardinalStone said in an update.
The investment firm said its valuation of MTNN incorporates 43.8% year on year revenue growth, driven by the tariff hike and a 16.0% capital expenditure intensity.
For the telecom company, analysts said they forecast an earnings before interest tax depreciation and amortisation (EBITDA) margin of 42.7% for financial year 25 and an average of 44.3% over our forecast horizon.
According to CardinalStone Limited, MTN Nigeria appears to be on track to recovery, evinced by its positive bottom-line print of N114.5 billion for Q4-2024 as against loss of N514.9 billion in 9M-2024.
Analysts said they attribute this positive result to the successful renegotiation of tower lease contracts that resulted in N113.8 billion in operating expenses savings; and the focus on expense efficiency, which has yielded OPEX savings of N41.9 billion.
This also include the continued increases in both usage and subscriber base in its voice and data businesses. In 2025, CardinalStone expects MTNN to continue its recovery course, supported by the recent tariff hike. The investment firm also noted positive impact if an improved macroeconomic conditions.
Analysts spotted significant reduction in foreign currency letters of credit obligations at $20.8 million as of financial year 2024, a significant reduction from $416.6 million in 2023, and a value-based capital allocation. #Analysts See 37% Upside in MTN Nigeria on New Target Price#