August 21, 2023/Cordros Report
Kindly click on the links to access our updated views on NASCON (HOLD, TP: NGN37.46/s) DANGSUGAR (HOLD, TP: NGN38.26/s), NESTLE (HOLD, TP: NGN1,308.19/s), UNILEVER (HOLD, TP: NGN17.37/s), GUINNESS (HOLD, TP: NGN72.08), and INTBREW (HOLD, TP: NGN4.48/s).
We maintain our positive outlook for NASCON for 2023E and raise our TP to NGN37.46/s (previously: NGN25.24/s) but downgrade the stock to a “HOLD”. The increase in our TP reflects our expectations of a stronger growth outturn than earlier envisaged, following a more favourable price/volume mix.
For DANGSUGAR, we revised our TP downwards to NGN38.26/s (Prev.: NGN38.57) and now rate the stock a “HOLD”. As is the case with NASCON Allied Industries Plc (NASCON), we cite the upcoming merger with the other Dangote food companies as a significant potential upside.
Elsewhere, for NESTLE, following the revisions to our forecasts and adjusting for cost pressures due to the highly inflationary environment and FX liquidity constraints within the country, we have lowered our target price to NGN1,308.19/s (previously: NGN1,408.84/s), resulting in a “HOLD” rating on the stock.
We adjust our target price for UNILEVER to NGN17.37/s (previously NGN19.56/s) while maintaining our “HOLD” rating. Over the rest of 2023FY, we expect UNILEVER’s profitability to be strained due to elevated cost pressures.
Meanwhile, for GUINNESS, we adjusted our target price to NGN72.08/s (previously NGN79.26/s) and maintained a “HOLD” rating on the stock. The reduction in our target price reflects the persistent cost pressures on the business induced by currency depreciation and increased energy costs.
Finally, for INTBREW, we reduce our Dec-23 target price to NGN4.48/s (previously: NGN4.90/s). Our short-term outlook for the brewer remains underwhelming as we expect earnings to remain under pressure given the challenging operating environment.
