UAC of Nigeria Market Value Increased by 12.5% to N105bn

UAC of Nigeria Market Value Increased by 12.5% to N105bn

UAC of Nigeria Plc (UACN) is now worth N105 billion in the equities market after the conglomerate company’s market value surged by 12.5% on stronger earnings expectations. 

According to data from the Nigerian Exchange, UACN Plc share price rose to N36 in the equities segment due to increased positioning in diversified company stocks from N32. In December, when its share price was N23.55, equities analysts at CardinalStone Securities Limited set a 12-month target price of N38.21 for UACN.

At the market price of N36, its 2.926 billion shares outstanding have been valued upward to N105.34 billion, according to data obtained by MarketForces Africa from the local bourse. UAC of Nigeria is trading at a 2.7% discount to its highest price on the Nigerian Exchange in the last 12 months. However, it is very far above its lowest price of N10.6 in the same period.

In its 9M-2024 earnings release, UAC of Nigeria Plc recorded an impressive performance, driven by volume growth in the packaged food and beverage segment and improved production efficiency.

Analysts at CardinalStone Securities Limited said in a note that the company’s performances were supported by tactical price adjustments and cost optimisation. Analysts raised UACN target price higher after the company’s earnings performance beat forecast.

“Given the company’s strong outperformance in 9M’24, with associated EPS ahead of our previous full-year forecast by 11.2%, we have updated our projections for 2024 and subsequent years to arrive at a new 12-month Target Price (TP) of N38.21,” CardinalStone said.

Already, UACN has inched near analysts target price in the equities. Just in December, CardinalStone said its target price suggests an implied 62.3% upside from the current reference price of N23.55. 

Analysts said UACN remains attractively valued, trading at significant discounts to its 5-year historical average multiples. UACN reported no foreign exchange losses in its 9-month of 2024 earnings release, thanks to the absence of foreign currency liabilities and effective management of FX-denominated costs, analysts said.

This prudent approach, coupled with higher cash balances and gains in its Treasury portfolio, resulted in FX gains of N10.19 billion, driving a 103.7% year-on-year increase in net profit to N13.67 billion.

“While FX gains significantly contributed to net profit, the company’s core operations remained strong, with operating profit rising by 73.2% to N12.30 billion in 9M-2024, according to CardinalStone Securities.

The investment firm project the net margin to rise to 10.3% in 2024 compared to 7.4% in 2023, marking its highest level in nine years.

Analysts said the growth will be driven by robust core earnings and increased finance income from FX gains. Excluding FX gains, the net income margin is expected to settle at 5.2%, up from 4.9% in 2023. #UAC of Nigeria Market Value Increased by 12.5% to N105bn CBN Opens FX Window for BDC to Stock up at NFEM Rate