• Login
  • Register
Nairametrics
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
Nairametrics
No Result
View All Result
Home Opinions Blurb

Why We Think The Current Guinness Share Price Is A Bubble And Should Currently Be No More Than N160

Nairametrics by Nairametrics
December 18, 2013
in Blurb
Why We Think The Current Guinness Share Price Is A Bubble And Should Currently Be No More Than N160
Share on FacebookShare on TwitterShare on Linkedin

Screenshot (20)

 

Guinness Nigeria Plc is a company we have been tracking over the last few weeks, since it released its 2013/2014 Q1 results. The results failed to meet expectations as top line revenue growth fell 5% and earnings per share 3.5%. This followed a poor 2013 FY results to June that saw Operating Profits drop 6.4% and earnings per share 16.5%. Despite these factors the company share price continues to be resilient and has basically remained flat at N240 since then. In fact for every losses it incurred it basically gained it back in subsequent trading sessions. In the last 1 year Guinness has lost just 5% in value compared to a market that is in the upward of 35%.

RelatedStories

Weekly Stock Update: Nigerian Exchange Group record growth w-o-w, up by 0.48%

UBA, three other heavyweights drive explosive rally as All-Share Index eyes N80 trillion 

July 11, 2025
FTN COCOA, UNITY BANK leads as NGX top gainers for the week

ACCESSCORP leads trading value as All-Share Index rises 0.28%; five stocks hit daily gain limit 

July 9, 2025

Despite this we still feel the stock is highly over valued and should be trading in the region of N160 and not the N240 you find today. Why do we think so? Well here are our reasons;

  • At the current price of N240 TTM P.E Ratio is a whopping 30x, 2.2x the NSE All Share Index average P.E Ratio. This is a stock that has trailed in the All Share Index all year.
  • Based on the above, we do not expect the share price to rise above N250 in the coming months as that will put it at a very high premium above the NSE All Share Index.
  • The current TTM dividend yield is paltry 2.9%, therefore the only other form of returns a shareholder can get is via capital gains. As we pointed out, Capital Gains have dropped 5% in the last 1 year.
  • Earnings Yield based on this price is as low as 3.1% and based on our future projected EPS for the company we do not see this improving significantly
  • The company is also currently facing massive competition from the likes of International Breweries, the wine market and other distillers locally and internationally. Their once revered dominance is very well under threat as such, topline revenue growth may continue to be in single digits
  • The company’s huge debt of about N28billion (Q 1 results) we project will cost them an average N4billion every year in interest cost (capitalized or not). This will continue to weigh down on earnings per share.
  • The alternative to the debt is also not very nourishing as raising fresh equity will dilue EPS further thus increasing P.E ratio
  • The current TTM ROE of 28% is good indication of how good the business is. However, that returns is for the shareholders who bought at N30 years ago and not for shareholders who buy at N240. The current price is about 7.8x book value. PEG ratio is also a massive 31x showing P.E ratio is growing at a much faster rate than EPS growth. Dangote Cement for example trades at a P.E ratio of 23x but has a PEG ratio of 0.47 by our estimates because it is growing its EPS at a faster rate of 53%.

These are just some of the reasons we have and there actually could be many more. This is a stock we actually want to own so do not see this analysis as a condemnation. We love you Guinness but at this current price, its a SELL for us.

Tags: All Share IndexANALYSISGuinness NigeriaNigerian stock marketNigerian Stocks
Nairametrics

Nairametrics

Nairametrics is Nigeria's top business news and financial analysis website. We focus on providing resources that help small businesses and retail investors make better investing decisions. Nairametrics is updated daily by a team of professionals. Post updated as "Nairametrics" are published by our Editorial Board.

Related Posts

Weekly Stock Update: Nigerian Exchange Group record growth w-o-w, up by 0.48%
Equities

UBA, three other heavyweights drive explosive rally as All-Share Index eyes N80 trillion 

July 11, 2025
FTN COCOA, UNITY BANK leads as NGX top gainers for the week
Equities

ACCESSCORP leads trading value as All-Share Index rises 0.28%; five stocks hit daily gain limit 

July 9, 2025
Seplat Energy
Equities

SEPLAT posts N13.5 billion in trades as All-Share Index eyes 121,000 level, mid-cap stocks shine 

July 4, 2025
Weekly Stock Update: Nigerian Exchange Group record growth w-o-w, up by 0.48%
Equities

CUTIX, ELLAHLAKES, others rally 10% as All-Share Index reclaims 120,000 level 

July 3, 2025
Stock market kicks off September in the red: ASI slips 0.15% amid declining trading volume 
Equities

Nigerian Stocks start July in red as All-Share Index slips 0.2%; Ellah Lakes leads daily volume 

July 2, 2025
Weekly Stock Update: Nigerian Exchange Group record growth w-o-w, up by 0.48%
Equities

Nigerian stock market soars 16.57% in the first half of 2025 — Top sectors behind the rally 

July 2, 2025
Next Post

Investor Watch: Why TB Rates May Drop This Holiday Season

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Emple
nlng
first bank








DUNS

Recent News

  • 10 Lagos hospitals delivering advanced surgeries and challenging outbound medical tourism 
  • Geregu Power reports N13 billion Q2 2025 profit, up 61% YoY, beats Q2 forecast 
  • HealthCap Africa launches HealthTech Unicorns Report 2.0 in Lagos, charts bold future for Africa’s health innovation

Follow us on social media:

Recent News

10 Lagos hospitals delivering advanced surgeries and challenging outbound medical tourism 

10 Lagos hospitals delivering advanced surgeries and challenging outbound medical tourism 

July 12, 2025
Geregu Power PLC wins “Most Compliant Listed Company” at 2024 Made of Africa Awards  

Geregu Power reports N13 billion Q2 2025 profit, up 61% YoY, beats Q2 forecast 

July 12, 2025
  • iOS App
  • Android App
  • Contact Us
  • Home
  • Markets
  • Sectors
  • Economy
  • Business News
  • Financial Literacy
  • Disclaimer
  • Ads Disclaimer
  • Copyright Infringement

© 2025 Nairametrics

Welcome Back!

Login to your account below

Forgotten Password? Sign Up

Create New Account!

Fill the forms below to register

All fields are required. Log In

Retrieve your password

Please enter your username or email address to reset your password.

Log In
Social Media Auto Publish Powered By : XYZScripts.com
No Result
View All Result
  • Home
  • Exclusives
    • Financial Analysis
    • Corporate Stories
    • Interviews
    • Investigations
    • Metrics
    • Economy
    • Nairalytics
  • Markets
    • Currencies
    • Cryptos
    • Commodities
    • Equities
      • Company Results
      • Dividends
      • Stock Market
    • Fixed Income
    • Market Views
    • Securities
  • Sectors
    • Agriculture
    • Aviation
    • Company News
    • Consumer Goods
    • Corporate Updates
    • Corporate deals
    • Corporate Press Releases
    • Energy
    • Entertainment
    • Financial Services
    • Health
    • Hospitality & Travel
    • Manufacturing
    • Real Estate and Construction
    • Renewables & Sustainability
    • Tech News
  • Business News
    • Budget
    • Public Debt
    • Funds Management
    • Tax
  • Financial Literacy
    • Career tips
    • Personal Finance
  • Lifestyle
    • Billionaire Watch
    • Profiles
  • Opinions
    • Blurb
    • Op-Eds
    • Research Analysis
  • Recapitalization
    • Access Holdings Offer
    • Fidelity Bank Offer
    • GTCO Offer
    • Zenith Bank Offer
  • Login
  • Sign Up

© 2025 Nairametrics