Morison Industries Extends 3-Day Rally Amidst Earnings Pressure
Morison Industries Plc extended its upward trajectory for the third consecutive session, as renewed buying interest and improving sentiment around its fundamentals continued to fuel demand. The stock sustained notable momentum throughout the week, closing strongly and edging closer to its 52-week high, reinforcing bullish undertones in the near term.
The stock opened at N4.27 on Friday against the backdrop of continued positive movement. Intraday trading was largely bullish, with Morison gaining 0.42 kobo to finish the session at N4.69, rounding off the week with strong market participation.
On a trend basis, Morison remains well above its 50-day moving average of N3.32, highlighting sustained medium-term accumulation. In addition, the current price levels remain significantly distanced from its 52-week low of N2.93, underscoring the stock’s recent recovery cycle.
Morison’s Q3 2025 performance reveals a business experiencing both revenue acceleration and rising operational pressures:
Revenue surged to N358.2m, up from N203.4m, reflecting strengthened top-line activity.
However, the cost of sales jumped markedly from N140.7m to N215.8m, tempering margin expansion.
Still, gross profit improved significantly to N142.4m, more than double the N62.7m posted in the prior year.
Yet this improvement was overshadowed by sharp inflationary cost pressures:
Distribution expenses rose to N37.6m, nearly doubling year-on-year.
Operating expenses increased drastically to N140.4m, compressing operational efficiency.
As a result:
Profit before tax declined from N32.3m to N21.5m.
Profit for the period mirrored this downturn, dropping to N21.5m from N32.3m.
Earnings per share dipped from 326 kobo to 217 kobo.
Revenue reserves slipped to N894.7m from N916.2m, reflecting weakened earnings retention capacity.
Investors’ Recommendation
While current price action reflects strong sentiment-driven momentum, the sustainability of this rally remains questionable in the face of rising operational costs, higher borrowings, and weakening retained earnings. The stock’s short-term ascent appears more aligned with speculative positioning rather than structural improvement.
Investors with a short-term risk appetite may still find opportunities in momentum-driven spikes. However, medium-to-long-term investors are advised to adopt a cautious stance until clearer catalysts emerge, particularly improvements in cost efficiency, operating leverage, and earnings quality.
Morison’s price rally is compelling in the short run, but current fundamentals suggest limited durability without strategic operational improvements and earnings stabilisation. #Morison Industries Extends 3-Day Rally Amidst Earnings Pressure#
