Nestle Nigeria Crosses N1 trillion at 52-Week High
Nestle Nigeria Plc rose by 10%, adding about N96 billion to its market value as the consumer group company returned to the trillion naira capitalisation group in the equities segment of the Nigerian Exchange (NGX).
According to trading details, Nestle Nigeria’s share price appreciated by N121 on Thursday to N1331, its highest quoted price in 12 months, as investors continue to react positively to the company’s earnings and prospects.
The consumer stock has seen increased demand from value hunters and alpha seekers following a stronger-than-expected Q1-25 performance, characterized by lower cost and operating margins.
In the first quarter of 2025, Nestle Nigeria posted a profit before tax of N51.15 billion, a significant improvement from pre-tax loss of N196.09 billion. The company’s net profit came in at N30.18 billion as against net loss of N142.68 billion, despite a high effective tax rate of 41.0%.
“We like that NESTLE was able to bring down its cost-to-sales ratio by 13.86 percentage points to 59.4% in Q1-2025 from 73.3% in Q1-2024”, Cordros Capital Limited said in a report. Analysts said this was achieved by improving energy efficiency and substituting imported inputs with local alternatives.
“We expect 2025 gross and earnings before interest, tax, depreciation, and amortisation margins to increase by 505 bps year on year and 656 bps year on year to print 37.0% and 27.1%”.
Market data revealed that Nestle Nigeria has already beaten analysts’ target price due to sharp movement seen in the equities market. Equities analysts recently revised the target price for Nestle Nigeria to N1,319.08/s from N930.10/s but retain a “HOLD” recommendation on the stock.
In its projection, Cordros Capital Limited saw revenue growth of 28.5% year on year, supported by strategic price increases and volume gains from recent capacity expansions across product portfolios. Analysts said they expect the company’s recent cost optimisation success to translate into a 505 basis point decline in cost-of-sales ratio to 63.0% from 68.0% in financial year 2024.
This is expected to provide the required room for gross and EBITDA margins to increase to 37.0% and 27.1% from 32.0% and 20.5% in 2024, respectively. While FX-related losses are expected to moderate, analysts said they still anticipate a modest FX loss in 2025.
The investment firm projects a positive equity position for Neste Nigeria in 2025—NGN37.07 billion from a negative equity balance of NGN92.29 billion in 2024. “This reflects our expectations on profitability in 2025, where we forecast a profit after tax of N129.36 billion, which should reduce the accumulated deficit on the balance sheet to N113.87 billion from N242.23 billion in 2024”.
Given the still negative retained earnings balance, analysts said they do not anticipate any dividend payouts in 2025. “We believe dividend payments will resume in 2026, when retained earnings is expected to turn positive—N19.26 billion”. #Nestle Nigeria Crosses N1 trillion at 52-Week High Naira Rallies Market-Wide in Absence of FX Pressures
