CardinalStone Hikes Transcorp Target Price, Cites TransAfam Turnaround
Analysts at CardinalStone Securities Limited have jerked up their target price for Transnational Corporation to N69.71 per share, citing the TransAfam turnaround as the reason for their buy recommendation.
Trading data from the Nigerian Exchange (NGX) showed that Transcorp Plc closed at N44.85 per share following a mild selloff, lower than the analysts’ reference price of N46.
“We revise our 12-month Target Price for Transnational Corporation Plc upward to N69.71 from N67.38 previously, maintaining a BUY recommendation on the counter”, CardinalStone Securities told investors in its equity report.
Analysts explained that the target price revision largely reflects a more sanguine five-year outlook, primarily underpinned by the significant operational turnaround at TransAfam Power following its capacity ramp-up in FY’25.
CardinalStone Securities noted that TransAfam generation capacity increased to 102MW from 53MW in financial year 2024— translating to a strong revenue contribution of N85.7 billion to total power revenues of N484.0 billion in 2025.
The investment firm said building on this momentum, management has outlined a near-term generation capacity target of 234MW for TransAfam Power, with peak generation capacity projected at 345MW.
“Our view suggests that power revenue should hit N566.9 billion in FY’2026 and grow to N665.5 billion in FY’2027”, CardinalStone Securities Limited told investors in its equity report.
Analysts also forecast Group revenue to grow at a five-year cumulative average growth rate (CAGR) of 17.1%, up from 15.8% previously, factoring in incremental revenue contributions from TransAfam Power, Transcorp Power, and Transcorp Hotel.
However, analysts noted that following the weaker-than-expected revenue print of N125.1 billion in Q1’2026, CardinalStone Securities indicated it has become cautious in its 2026 revenue estimate.
The company’s bottom line suffered as revenue fell by 12.9% year on year in Q1-2026, a development attributed to vandalism of transmission infrastructure and gas supply disruptions, which limited power generation capacity to 454MW.
“Although management has stated that it is working with key stakeholders to address these issues, we maintain a conservative position.
“Our views on margins are directionally unchanged. However, a risk to this expectation would be higher-than-expected impairments for NBET receivables, which could swing earnings before interest and tax (EBIT), pretax profit (PBT) and profit after tax (PAT) margins”, CardinalStone said.
The investment firm said it now projects a PAT of N154.3 billion for 2026, an increase of 13.6% year on year, and an Earnings Per Share (EPS) of N9.59.
Elsewhere, the success of the Presidential Power Debt Programme remains a key upside risk for TRANSCORP. The first tranche raised N501.0 billion, with cash disbursements to owed GenCos still ongoing.
Complementing this, the Government advanced a royalty-offset mechanism to address legacy debts owed to gas suppliers, which remains consistent with the central goal of improving liquidity across the power value chain, CardinalStone Securities Limited stated.
