Transcorp Group Price Target Upgraded to N67.38 Per Share on Stronger Earnings Outlook

Transnational Corporation Plc (Transcorp Group) price target has been upgraded to N67.38 per share by investment firm Cardinal Stone Partners on stronger earnings outlook.

Transcorp delivered a robust earnings performance in the nine months’ period to September 2025, despite notable cost pressures amidst lingering liquidity challenges in the power sector.

“We expect this robust earnings performance to persist into the fourth quarter (Q4) of 2025. Therefore, we maintain our Full Year 2025 projections with revenue expected to print at N557.5 billion,” Cardinal Stone analysts led by Philip Anegbe said in a December 12 note to clients.

“In the final quarter of the financial year, we believe that revenue growth would be largely supported by the sustained improvement in generation capacity in its power businesses (Transcorp Power and Transafam).”

For Full Year (FY) 2026, Cardinal Stone identified potential key drivers for earnings growth, such as:  sustained improvement in power generation, potential upward tariff reviews, improved gas supply and pricing dynamics, legacy debt dismantling, and effective execution of other power sector-focused reforms that would be supportive of liquidity.

For the hospitality business segment, they see legroom for higher Average Daily Rate (ADR) and occupancy rates, with deepened value extraction of the 5,000-seater event centre.

The Transcorp Centre is positioned as Nigeria’s Flagship Policy and Business Venue. In June 2025, the centre hosted the 32nd Afreximbank Annual Meetings (AAM2025), gathering over 4,000 delegates from over 80 nations.

“We expect a notable revenue contribution from the hospitality business segment in Q4 ’25, which would be driven by the higher ADR in the period, and the expected seasonal lift in occupancy associated with the December festivities,” the Cardinal Stone analysts said.

Buoyed by the improving liquidity outlook, the analysts maintained a constructive view on the company’s cash position—reflected in expectation of shorter receivable days and robust growth in operating cash flow (+42.4% YoY) in FY’26 estimates.

This improved cash-generation profile also underpins their forecast for a healthy dividend payout of N2.00 in Full Year 2026.

Reflecting the stronger earnings outlook, amidst expectations for improved cost dynamics, a lower risk-free assumption (16.4% vs. 18.0% previously), and a lower equity risk premium (13.8% vs 14.3% previously), Cardinal Stone upgraded their 12-month target price to N67.38 (vs. N62.47 previously), implying a 55.6% upside to the reference price of N43.30.

“We reiterate our BUY recommendation on the counter,” the analysts said.

“At current levels, TRANSCORP trades at a price to earnings (P/E) ratio of 7.2x and Enterprise Value EV/EBITDA of 3.2x, materially below its five-year historical averages of 15.7x and 5.3x, respectively.”

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