Weak Upside: Analysts Downgrade Dangote Cement Stock to Sell
With about 90% under Dangote Industries Limited control, equities analysts have hinted about negative potential upside in Dangote Cement Plc stocks.
Dangote Cement Plc remains the most valuable listed company on the Nigerian ExExchange, following strategic bet on the company by billionaire Femi Otedola after the cement stock plunged early in the year.
On the Nigerian Exchange, Dangote Cement Plc market valuation has remained steadies at N11.19 trillion followed thin trading activities on the stock. MarketForces Africa reported that Femi Otedola ramped up significant shares from the open market in the first half while hunting for return.
In its weekly stock recommendation list, Atlass Portfolios Limited noted that the market price of Dangote Cement Plc is far ahead its estimates. The firm set its price target on the cement at N600 per share. However, Dangote Cement Plc has been trading at a steady price of N656.70 over long weeks without moving along market directions.
Due to thin trading on the stock as a result of huge control by Dangote Industries Limited, the cement company stock market price continued to bucked trend in the market. The group had successive repurchase its shares from investors in the local market with the aim to stem price volatility.
With some 60% market share, the company maintain lead among cement oligarchy with N26.47 earnings per share and healthy return on equity of 26.40%, Atlass Portfolios figures showed.
Dangote Cement Plc has achieved impressive year to date return of 105.28% with low share price volatility in the equities market. The stock is about 14% below its 52 week high when the company share price peaked at N763 before the momentum doused.
Apel Asset Limited also kept the cement names in hold bucket, advised investors to be neutral trading Dangote Cement Plc. In its estimate, Apel Asset Limited place N683.15 per share on Dangote Cement PLC with less than 5% upside potential.
Recently, CardinalStone Securities Limited announced hold recommendation on the cement name. It appears the company has peaked in terms of valuation on the Nigerian Exchange. NGX Suspends 8 Companies for Failure to File Reports
