Dangote Cement Trades at 50% Discount over Sell Pressures
Investors’ weak sentiment on Sub-Saharan Africa’s largest cement company, Dangote Plc, has continued to drag its market value despite positive expectations about the group earnings outlook. Dangote Cement Plc lost about N256 billion in the equities market due to sustained sell-offs that started last few days amidst earnings expectations.
Its market price declined to N385 billion on Tuesday as about 1.27 million of the cement company’s shares were transacted in the local bourse, from N400. In absolute terms, Dangote Cement Plc lost N15 on each of its 17.040 billion shares outstanding in the stock market.
Its market value was adjusted to N6.560 trillion, according to details from the Nigerian Exchange on Tuesday ahead of its earnings release. Dangote Cement Plc market value had crossed N13 trillion market valuation in the local bourse before it started to retreat due to investors exiting their positions.
The stock price is now 50% below its best price ever on the Nigerian Exchange trading platform. Following the release of 9M’2024 result, analysts at CardinalStone Securities Limited revised the 12-month target price downward to N493.77 from N524.32 previously, representing a 3.1% potential upside from N478.80 reference price.
In its review note, CardinalStone Securities Limited said DANGCEM is well-positioned for a strong finish in 2024 and steady growth in 2025, supported by increased volume contributions from its Nigerian operations, bolstered by the government’s ongoing focus on infrastructure development and elevated pricing across both Nigerian and Pan-African markets.
Despite persistent cost pressures in the short term, analysts said they anticipate resilient margins driven by strategic initiatives such as the transition to alternative energy sources, enhanced operational efficiencies, and a slower pace of currency devaluation.
Analysts, however, adjusted volume estimates for 2024 downward to 28.4 MMt from 30.0 MMt previously to account for challenges in DANGCEM’s Pan-African operations, which recorded a 1.6% year-on-year decline to 8.36 MMt as of 9M-2024, particularly due to a drag in Tanzania, where adverse weather conditions affected production and sales.
“DANGCEM is well-positioned for a strong finish in 2024 and steady growth in 2025, supported by increased volume contributions from its Nigerian operations, bolstered by the government’s ongoing focus on infrastructure development and elevated pricing across both Nigerian and Pan-African markets,” CardinalStone said in its note.
Despite persistent cost pressures in the short term, analysts anticipate resilient margins driven by strategic initiatives such as the transition to alternative energy sources, enhanced operational efficiencies, and a slower pace of currency devaluation. #Dangote Cement Trades at 50% Discount over Sell Pressures Enugu to Establish 340 Green House Technology Farms
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