November 12, 2026/Cordros Report
Following a strong operating performance in 9M-26, we update our 2026E estimates and outlook for Dangote Cement Plc (DANGCEM). Our revised 2026E forecasts point to revenue growth of 21.3% y/y (Prev.: +20.6% y/y), reflecting a more constructive outlook for the Nigeria OpCo (+20.2% y/y | Prev.: +19.3% y/y). We also raise our EBITDA margin forecast to 47.1% (Prev.: 46.5%), reflecting lower cost assumptions, supported by the continued shift to CNG powered logistics and greater alternative fuel use. In addition, we lower our net finance cost forecast to reflect debt repayment during the period. Consequently, we raise our EPS forecast to NGN85.74 (Prev.: NGN78.69).
Based on these revisions, we raise our target price to NGN1,324.19/share (Prev.: NGN1,041.59/share) and retain our “HOLD” rating on the stock, as the target price implies a downside of 9.9% to the current market price (NGN1,469.90/share). On shareholder returns, we forecast 2026E DPS of NGN70.00, implying an 81.6% payout ratio and a dividend yield of 4.8% at the current market price. Based on our revised 2026E estimates, DANGCEM trades at 17.1x P/E and 9.8x EV/EBITDA, vs. peer median forward multiples of 16.9x and 9.8x, respectively.
Volume drives revenue upgrade and lower finance costs support earnings: We raise our 2026E revenue growth forecast to 21.3% y/y (Prev.: +20.6% y/y), reflecting a stronger revenue outlook for the Nigeria OpCo at 20.2% y/y (Prev.: +19.3% y/y), primarily driven by a higher volume growth assumption of 4.4% y/y (Prev.: +2.8% y/y) which more than offsets a lower realised price growth assumption of 15.2% y/y (Prev.: +16.0% y/y). Meanwhile, we retain our Pan African OpCo revenue growth forecast at 14.7% y/y. On costs, we lower our COGS growth forecast to 14.2% y/y (Prev.: +15.8% y/y), largely reflecting lower fuel & power costs (+4.3% y/y | Prev.: +17.8% y/y) and plant maintenance costs (-4.5% y/y | Prev.: +5.5% y/y), which outweighs higher projected raw material input costs (+44.4% y/y | Prev. +18.9% y/y). We also trim our OPEX growth forecast to 23.5% y/y (Prev. +24.0% y/y). Consequently, we raise our EBITDA margin forecast to 47.1% (Prev.: 46.5%). Below the operating line, net finance costs is forecast to decline by 71.1% y/y (Prev.: -24.8% y/y), reflecting a 72.4% y/y reduction in interest expense due to a lower debt balance (-50.4% y/y | Prev.: -35.8% y/y). We also lower our effective tax rate to 33.8% (Prev.: 34.0%). Accordingly, we raise our EPS forecast to NGN85.74 (Prev.: NGN78.69).
Net cash position strengthens balance sheet: Operating cash flow funded a NGN538.96 billion reduction in borrowings, NGN301.70 billion of cash capex and a NGN753.85 billion dividend, moving DANGCEM from net debt of NGN682.92 billion at the end of 2025 to net cash of NGN51.14 billion at 9M-26. We forecast net debt/EBITDA to turn negative at 0.20x in 2026E and 0.25x in 2027E. We keep our 2026E DPS forecast at NGN70.00 (payout ratio of 81.6% | Prev. 89.0%), above management’s minimum of 80.0% of profit after tax, and forecast DPS of NGN100.00 in 2027E (payout ratio of 85.2%).
Valuation: Our target price is NGN1,324.19/s, derived from a 50/50 blend of DCF and relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN1,236.81/s) and FCFE (NGN1,145.40/s) estimates, assuming an 18.1% WACC, 20.0% CoE and 4.0% terminal growth rate. Similarly, our multiple based FV was derived from a blend of EV/EBITDA (NGN1,464.75/s) and P/E (NGN1,449.78/s) estimates, utilising MEA peer averages for both factors (9.8x and 16.9x, respectively) as multipliers.