November 13, 2026/Cordros Report
In this report, we update our estimates and outlook for C & I Leasing Plc (CILEASING), following the release of their 9M-26 results. We believe the company’s fundamentals remain solid, supported by continued expansion in fleet management, driven by a larger managed fleet and higher rental rates. Accordingly, we forecast gross earnings growth of 4.6% y/y to NGN52.44 billion in 2026E (2025FY: +36.5% y/y) and an EBITDA margin of 49.3% (2025FY: 50.4%).
However, the absence of the tax credit recognized in 2025FY is expected to weigh on EPS, which we forecast to decline by 39.7% y/y to NGN0.80 (2025FY: NGN1.33). Furthermore, our higher CAPEX assumption reduces our free cash flow forecasts and, in turn, our valuation. Consequently, we lower our year-end target price to NGN6.56/share (Prev.: NGN8.98/share), implying a 26.2% upside from the current price of NGN5.20, and maintain our “BUY” rating on the stock. We project 2026E DPS of NGN0.07/share, implying a dividend yield of 1.3%. Based on our estimates, CILEASING is trading at 2026E P/E and EV/EBITDA of 6.5x and 3.3x, respectively, vs. peer multiples of 10.8x and 4.1x.
Gross earnings growth intact, higher tax charge drives earnings decline: We forecast gross earnings growth of 4.6% y/y in 2026E (2025FY: +36.5% y/y), supported by continued expansion in fleet management. Across the major gross earnings lines, we project lease income growth of 4.9% y/y (2025FY: +43.1% y/y) and net outsourcing income growth of 15.3% y/y (2025FY: +26.2% y/y). On costs, we expect lease expenses to rise by 7.1% y/y (2025FY: +74.0% y/y), outpacing gross earnings growth as the deployed fleet expands. On OPEX, we forecast growth of 10.9% y/y (2025FY: +12.3% y/y), driven by higher depreciation (+12.7% y/y) and personnel expenses (+13.6% y/y). Consequently, we forecast EBITDA margin to contract by 108bps y/y to 49.3% (2025FY: 50.4%). Below the operating line, we forecast finance costs to decline by 3.9% y/y to NGN13.71 billion (2025FY: +35.1% y/y), supported by lower finance lease interest. Accordingly, we forecast PBT to decline marginally by 1.1% y/y. Meanwhile, EPS is expected to decline by 39.7% y/y to NGN0.80, reflecting the absence of prior tax credit.
Leverage to peak near term and ease thereafter: We expect CILEASING’s leverage to rise in 2026E, driven by higher secured lease notes and commercial notes, which increase total debt to NGN74.53 billion (2025FY: NGN65.24 billion). Accordingly, we forecast net debt to equity and net debt to EBITDA of 1.3x and 2.7x, respectively (2025FY: 1.2x and 2.4x), while interest coverage remains unchanged at 1.1x. Over our forecast horizon (2026E–2030E), we expect leverage to moderate as debt repayments gradually reduce the outstanding balance, with net debt to equity and net debt to EBITDA averaging 1.1x and 2.3x, respectively (2021–2025 average: 1.6x and 3.2x), and interest coverage averaging 1.6x (2021–2025 average: 1.0x).
Valuation: Our target price is NGN6.56/s, derived from an 80/20 blend of DCF and sector relative valuation estimates. Our DCF FV is derived from an equal blend of FCFF (NGN5.65/s) and FCFE (NGN5.68/s) estimates, assuming a 16.7% WACC, 26.1% CoE, and a 4.0% terminal growth rate. Similarly, our multiple-based FV was derived from an equal blend of EV/EBITDA (NGN11.65/s) and P/E (NGN8.65/s) estimates, utilising MEA peer averages for both factors (4.1x and 10.8x, respectively) as multipliers.