March 4, 2026/Cordros Report
In this note, we update our 2026E outlook for Airtel Africa Plc (AIRTELAFRI) following the release of its 9M-26 results. The company reported a strong performance in the period, with revenue up 28.3% y/y, EBITDA margin expanding by 272bps y/y to 48.9%, and EPS rising sharply by 198.2% y/y to USD0.13, underpinned by sustained subscriber additions (+16.28 million y/y), resilient data demand, and relative FX stability across key markets. Following our review, we raise our target price by 4.1% to NGN4,362.49/s (Prev: NGN4,189.10/s) and maintain our BUY rating. The valuation uplift reflects (1) increased subscriber net add to 181.73 million; (2) higher revenue growth forecast of 33.8% y/y; (3) higher EBITDA margin projection of 49.0% (+281bps y/y); and (4) an upward revision to our 2026E EPS to USD0.22 (+273.3% y/y). We also project a total DPS of USD0.07 (Div yield: 4.4%). On our revised estimates, AIRTELAFRI trades at a 2026E P/E and EV/EBITDA of 7.0x and 3.4x, respectively.
Earnings outlook strengthened on robust revenue growth: We forecast aggregate revenue growth of 33.8% y/y (Prev: +18.9% y/y), driven by sustained expansion across mobile services (+26.9% y/y) and mobile money (+74.9% y/y). Within mobile services (79.7% of revenue), we expect broad based growth across core lines – data (+34.7% y/y), voice (+19.8% y/y) and other revenue (+26.5% y/y) – supported by a 15.62 million increase in the total customer base to 181.73 million (Data subs: +9.47 million to 82.83 million) and a 14.8% y/y rise in segment ARPU to USD2.53. For mobile money (20.3% of revenue), we project segment revenue growth of 74.9% y/y, underpinned by higher subscriber base (+8.05 million to 52.65 million) and a 16.0% y/y increase in ARPU to USD2.31. Across operating regions, we project broad based revenue growth – Nigeria (+52.6% y/y; 24.1% of total revenue), East (+32.8% y/y; 48.7%), and Francophone (+22.7% y/y; 27.2%) Africa. Meanwhile, EBITDA margin is expected to expand by 281bps y/y to 49.0% (Prev: +178bps y/y to 48.0%), reflecting stronger topline momentum and comparatively slower growth in operating costs (+26.4% y/y). In addition, we anticipate a 3.6% y/y decline in finance costs, supported by currency stability across operating markets. Overall, we now project EPS to rise by 273.3% y/y to USD0.22.
NGX listing offers relative value amid liquidity distortions: AIRTELAFRI trades at a discount on the NGX relative to its London listing, reflecting structural liquidity constraints typical of a secondary listing rather than any fundamental divergence. With an average traded value of NGN2.79 million in 2026YTD and a daily volume of 1,116 shares, the order book is shallow, limiting price discovery. Market indications suggest local investors are generally unwilling to sell in meaningful quantities, with sell orders often below the c.100k share threshold typically required to move the price. On the LSE, deeper liquidity and share buybacks supported a 212.7% re rating in 2025. At GBP3.52, the implied NGX equivalent is near NGN6,400.00, pointing to a valuation gap that represents an upside and potential arbitrage opportunity.
Valuation: Our target price is NGN4,362.49/s, derived from a 50/50 blend of DCF and sector relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN5,395.18/s) and FCFE (NGN3,097.04/s) estimates, assuming a 17.1% WACC, 27.3% CoE and 4.0% terminal growth rate. Similarly, our multiple based FV was derived from a blend of EV/EBITDA (NGN4,448.56/s) and P/E (NGN4,509.16/s) estimates, utilising MEA peer averages for both factors (5.3x and 14.6x, respectively) as multipliers.
