Aradel Gets N848 Target Price as Renaissance Equity Stake Lifts Earnings

Aradel Holdings Plc has seen its target price raised 60% as it reported strong Half Year 2026 earnings, supported by higher crude and refined product volumes as well as a $46.0 million uplift in profit from associates ND Western and Renaissance Africa Energy Company (RAEC).

Analysts at Cardinal Stone led by Philip Anegbe maintained a BUY rating on the stock, with the revised Target Price of N848 per share implying a 60% upside to the current market price of N530 as at September 11.

“Our model revisions yield a new 12-month TP of N848.13 based on the official FX rate of N1,502.50/$ as of September 10, 2025. (vs. N840.35, based on the official FX rate of N1,580.00/$, previously). The uplift reflects stronger associate earnings from ND Western and the newly consolidated RAEC stake,” Anegbe said in a September 11, note to clients.

Aradels’s net income rose by 50.8% year-on-year for the H1 period to $94.5 million, benefitting from resilient upstream production, and improved refinery utilisation, which together offset margin pressures from softer oil prices and elevated royalties.

The second quarter (Q2) 2025 period marked the first consolidation of earnings from Renaissance Africa Energy Company (RAEC), where ARADEL now holds a combined 33.3% effective stake (12.5% direct, 20.8% indirect via ND Western).

Consequently, the share of associate profit jumped from $3.2 million in Q1’25 to $46.0 million in H1’25, reflecting stronger contributions from both ND Western and the newly incorporated RAEC stake.

“We forecast this momentum to persist through FY’25, leading to a PBT margin of 55.5% on the back of expanded upstream exposure, and a PAT margin of 43.7%, supported by a lower effective tax rate given the tax-exempt nature of associate income,” Anegbe said.

Aradel Holdings Plc, a Nigerian integrated energy firm, has a market capitalization of N2.33 trillion ($1.5 billion) and its stock has returned -11.34% year to date, underperforming the market which is up 36.66% so far in 2025.

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