CardinalStone Partners Limited has reiterated its confidence in Nigerian Breweries Plc (NB), maintaining a “Buy” recommendation while raising the target price to N82.83, up from N67.00 previously. The upward revision follows the brewer’s nine-month financial performance and growing optimism about a rebound in 2026, supported by improving sales volumes, cost optimization, and a more stable macroeconomic environment.
According to the investment firm, Nigerian Breweries’ earnings are poised for stronger growth in the coming year, particularly as the company moves past the one-off impairment charges and foreign exchange challenges that constrained performance in 2025. “After a two-year hiatus in dividend payments caused by macroeconomic headwinds, the company’s recovery trajectory suggests a likely return to dividend payouts by full year 2026,” CardinalStone noted in its report.
Stronger Margins and Earnings Outlook
CardinalStone analysts anticipate that Nigerian Breweries will experience improved profitability in the next fiscal year as cost pressures begin to ease. During the third quarter of 2025, the brewer’s cost of goods sold (COGS) increased to 66.2%, largely due to higher input and energy costs driven by inflation and foreign exchange volatility.
Despite these challenges, the firm maintains that Nigerian Breweries’ operational efficiency, wide distribution network, and strong brand equity will help sustain its financial resilience. For the 2025 financial year, the firm revised its gross, EBIT, and net margins downward to 40.0%, 16.3%, and 8.7%, respectively, due to the temporary cost spikes. However, these are projected to rebound to 40.5%, 16.7%, and 9.4% in 2026 as input prices normalize and sales volumes recover.
Revenue is forecast to reach N1.88 trillion in 2026, reflecting both higher sales and effective cost management initiatives. The company’s continued focus on expanding its product portfolio and strengthening its market presence across Nigeria’s diverse consumer segments is expected to play a key role in driving these gains.
Operational Efficiency and Liquidity Strength
Nigerian Breweries’ liquidity position remains robust, with analysts highlighting its efficient cash management practices and supplier relationships as major strengths. The company’s cash conversion cycle has benefited from favorable credit terms and disciplined working capital management, both of which have contributed to its operational stability.
CardinalStone expects payable days to remain strong, underscoring NB’s strong bargaining power with suppliers and its ability to maintain cost discipline despite inflationary pressures. This operational rigor, combined with improved earnings, is likely to enhance the brewer’s liquidity profile heading into 2026.
Dividend Resumption on the Horizon
Perhaps the most encouraging signal for investors is the potential return of dividends in 2026. Following two years of suspended payouts—triggered by sharp naira devaluation and spiraling inflation between 2023 and 2024—Nigerian Breweries’ retained earnings are now on the path to recovery.
As of the first nine months of 2025, the brewer reported a negative retained earnings balance of N85.5 billion, a significant improvement from N169.7 billion in December 2024. CardinalStone projects that by the end of 2026, retained earnings could turn positive, closing at N32.2 billion, assuming a 60% dividend payout ratio.
This turnaround would mark a pivotal milestone for the company, signaling restored investor confidence and a return to normalcy after a challenging period marked by foreign exchange losses and rising production costs.
Balance Sheet Stability and Growth Prospects
Nigerian Breweries’ total equity rose by 17.8% to N546.5 billion, while total assets stood at N1.11 trillion, only slightly down by 2.4% from the previous year. Its property, plant, and equipment remain a key component at N564 billion, while inventories—valued at N224.1 billion—continue to represent a large portion of total assets.
CardinalStone believes the brewer’s strong asset base, combined with ongoing efficiency improvements, will sustain growth momentum into 2026 and beyond.
In conclusion, the investment firm’s raised target price and reaffirmed Buy rating reflect growing optimism about Nigerian Breweries’ ability to navigate Nigeria’s complex macroeconomic landscape. As consumer demand stabilizes, costs normalize, and the company resumes dividend payments, investors may find renewed value in one of Nigeria’s most enduring consumer brands.
