Dangote Cement Plc, Nigeria’s biggest company by market value, had its price estimate raised to NGN171 a share at Stanbic IBTC Bank Plc, citing its highest capacity utilisation in the fourth quarter.
The estimate was increased from 170.5 naira, the Lagos- based bank said in an e-mailed statement. Stanbic reiterated its “buy” recommendation on the company.
The new price estimate implies a 43 percent upside to the stock’s current price of 120 naira. Dangote Cement shares started trading on the Nigerian Stock Exchange on Oct. 26 at 135 naira each. Since then, it declined 11 per cent “mainly because of relatively poor sentiment towards the stock among local investors,” Stanbic said.
Dangote’s “superior” fiscal year 2010 earnings results will “surpass prevalent expectations and serve as a stock-price catalyst over the short term,” the Stanbic report said, without disclosing forecasts. Dangote is expected to raise its share of the Nigerian cement market to 70 percent by fiscal 2011 from 57 per cent now.