CardinalStone has reaffirmed its Buy rating on Nigerian Breweries Plc after reviewing the company’s nine-month performance. The firm has now raised its target price to ₦82.83, up from the previous ₦67.00, citing expectations of stronger earnings in the 2026 financial year.
The updated outlook is driven by improved sales volumes supported by the company’s extensive distribution network, along with ongoing cost-optimisation efforts. CardinalStone also noted that the absence of the major one-off impairment charges that affected Nigerian Breweries’ third-quarter 2025 results will help boost future performance.
Despite pressure on margins in Q3—where cost of goods sold climbed to 66.2% and full-year 2025 gross, EBIT and net margins were revised to 40.0%, 16.3% and 8.7% respectively—the firm expects these challenges to ease in 2026. Revenue is projected to rise to about ₦1.88 trillion, with margins improving moderately to 40.5% for gross margin, 16.7% for EBIT, and 9.4% for net margin.
CardinalStone also highlighted Nigerian Breweries’ solid cash-conversion cycle, supported by favourable supplier credit terms. This, they believe, will continue to strengthen the company’s liquidity and overall operational efficiency heading into the next fiscal year.
A significant point of interest for investors is the potential return of dividend payments in FY-26. After a two-year pause due to tough economic conditions, the company’s earnings recovery suggests a resumption of dividends, with retained earnings projected to reach around ₦32.2 billion if the expected payout ratio is maintained.
Overall, the reaffirmed Buy rating, stronger target price, and improving financial outlook make Nigerian Breweries an appealing consideration for investors as the company prepares for a more stable and profitable year ahead.