Analysts at Cordros Securities have revised their initial target price for Lafarge shares for the full-year 2025, raising it by 4.0% to N104.71 per share.
Following Lafarge’s stronger-than-expected Q1 2025 results in volume and overall performance, the financial services firm has revised its previous target price of N100.68 per share.
In a recently published equity research update, Cordros highlighted Lafarge’s impressive 80.3% revenue growth in Q1, along with a favorable price-to-volume mix, as key drivers behind the upward revision.
Encouraged by the strong start to the year, the analysts have significantly upgraded their revenue projection for the full year 2025, now estimating a 40.7% year-over-year increase, up from the earlier forecast of 21.7%.
The firm now anticipates Lafarge’s total cement volume to reach 6.41 million tons, alongside a 23% upward revision in cement prices, which are expected to average N153,000 per ton, compared to the previously forecast N136,000 per ton.
Explaining the increase in projected volume, the analysts noted:
“The volume increase is driven by expectations of stronger public and private sector demand, improved production efficiency, and the market’s positive reception of the company’s new innovative products.”
Cordros also revised its earnings projection upward, forecasting a 110.0% year-over-year growth in earnings per share (EPS), to N13.06.
This represents a significant reset from the earlier projection of N10.44, or 67.9% growth, and is attributed to Lafarge’s success in reducing finance costs by 96.9% during the first quarter.
What to know:
The new target price of N104.71 is based on an 80/20 blend of Discounted Cash Flow (DCF) and sector-relative valuation methods.
- The DCF model used estimates for Free Cash Flow to the Firm (FCFF) and Free Cash Flow to Equity (FCFE) of N93.59 and N87.05, respectively.
- Sector-relative valuation applied Bloomberg’s peer medians of 6.8x (EV/EBITDA) and 12.5x (P/E), resulting in fair value estimates of N161.67 and N163.23.
Assumptions included a 30% corporate tax rate and a 23.9% Weighted Average Cost of Capital.
- As of the market close on May 9, 2025, the company’s shares were priced at N81.95.
Lafarge’s Q1 performance summary
Lafarge Africa Plc published its financial statement for the quarter ended 31st March 2025, reporting a pre-tax profit of N73.1 billion.
This reflects a substantial increase of 739.47% compared to the N8.7 billion pre-tax profit reported in Q1 2024, fueled by a significant rise in revenue.
The company’s Q1 2025 revenue reached N248.3 billion, marking an 80.26% increase from the N137.7 billion recorded in the same quarter the previous year.
- Of the total, cement sales made up the largest share, contributing N242.6 billion.
- Aggregates and concrete added N5.4 billion, while ‘other products’ accounted for N281 million.
Although operating costs loomed, the company’s profits from core operations reached N71.6 billion, reflecting an impressive increase of 136.97% from the previous year’s figure of N30.2 billion.
