|
Listen now
Getting your Trinity Audio player ready...
|
The target price of MTN Nigeria (MTNN) has been raised to N360 per share by Cardinal Stone Partners, amid plans announced by parent MTN Group to reduce its stake in MTNN through a public offer.
“Following engagement with the management of MTN Nigeria Communications Plc (MTNN), we have revised our Full Year (FY) 2025 revenue projection for the business to N4.9 trillion (vs. N4.8 trillion prior),” Cardinal Stone Partners said in a May 26 note to clients.
“Adjustments to our model led to a new 12-month target price (“TP”) of N360.53, reflecting a 33.5% potential upside from its current reference price and an unchanged BUY recommendation.”
MTNN has an estimated forward EV/ EBITDA multiple of 3.8x compared to a next twelve-month Bloomberg peer EV/EBITDA of 4.1x.
Cardinal Stone analysts say the adjustment in the revenue projection reflects the greater-than-anticipated impact of the increase in telecoms tariffs on the voice and data segments.
Notably, the tariff increase was announced in February and mostly implemented in the last two weeks of March 2025, indicating that the strong revenue growth of Q1’25 (+40.5% YoY) was only minimally driven by the price adjustment, with further support coming from growth in minutes of use and megabits per user.
“Ceteris paribus, we expect the impact of the tariff adjustment to be more pronounced in the coming financial results (i.e. Q2 onwards),” they said.
MTN Nigeria posted a profit after tax (PAT) of N133.68 billion in March 2025, from a loss of N392.69 billion as at March 2024.
Between FY’19 and FY’24, MTNN’s monthly average data usage per subscriber grew by a CAGR of 45.2% to 11.2 GB.
Cardinal Stone expects the full implementation of the 50% increase in tariff, combined with the relatively mild increase in data usage, to result in a 68.2% surge in data revenue by Full Year 2025.
Meanwhile, MTN Group through its President, Ralph Mupita has announced plans to reduce its stake in MTN Nigeria through a public offer when the latter returns to positive equity position and dividend payments.
Specifically, the Group is looking to reduce its stake from 76.0% to 65.0%, consistent with its commitment to deepen local ownership in MTNN.
The proposed offer would represent the Group’s second major retail public offering in Nigeria, following the 2021 sale of 575.0 million MTNN shares to local investors.
MTN Nigeria closed trading at N270 per share on Monday (May 26) and has a market capitalization of N5.66 trillion.
Follow the MoneyCentral Nigeria channel on WhatsApp: Click here!
