Analysts at CardinalStone have revised their full-year 2025 revenue forecast for Dangote Cement to N4.2 trillion, a slight upgrade from their earlier estimate of N4.1 trillion.
The revision was published in their latest company update titled “Dangote Cement Plc: Sustaining Market Leadership Amid Exogenous Headwinds”.
According to the report, the upward revision reflects expectations of revenue growth in 2025, despite ongoing challenges across the company’s Pan-African operations, where production volumes have been under pressure.
CardinalStone pointed to several factors weighing on regional performance, including delayed government spending in Ethiopia, uncertainty due to elections in South Africa, and delays in Senegal’s construction sector.
In Nigeria, the analysts noted: “Production volumes fell by 4.3% year-on-year to 4.4 million tonnes in Q1 2025. The decline is due to weaker private sector demand amid elevated prices, increased market competition, and rising insecurity, particularly in the North Central region.”
Despite these headwinds, CardinalStone maintained a HOLD rating on Dangote Cement shares, particularly for investors who entered at their reference price of N440. They set a 12-month target price of N481.33 per share.
Recall that for the full-year 2024, Dangote Cement reported revenue of N3.5 trillion, representing a 62% year-on-year increase.
- Cement sales made up 99.99% of this figure.
Q1 Margins
According to CardinalStone analysts, Dangote Cement delivered stronger margins in Q1 2025, with gross margin rising by 7.8 percentage points to 59.1%, and EBIT margin climbing by 8.7 percentage points to 40.0%.
Explaining the improvement in profitability, the analysts said:
“This uptick stemmed from easing energy cost pressures amidst the company’s green energy and logistics efficiency initiative.”
They added that haulage costs declined by 1.1%, supported by the deployment of CNG-powered trucks acquired in 2024, which helped streamline logistics and reduce fuel expenses.
Looking ahead, the analysts projected further margin strength, stating:
“For FY 2025, we forecast gross and EBIT margins at 58.9% and 38.5%, respectively, compared to our earlier estimates of 50.3% and 28.2%.”
On the financing side, the analysts said finance costs are expected to rise only slightly, as the company pays off major debts, including a N100 billion bond and a N50.3 billion loan from its parent company, while covering short-term needs with a new N100 billion commercial paper.
With lower foreign currency exposure, a more stable foreign exchange environment, and ongoing cost efficiencies, profit margins are expected to see meaningful improvement through the rest of the year.
What to know
- The N481.33 price target was based on a blended valuation approach, using P/E, P/BV, and EV/EBITDA metrics across forecast years.
- The valuation captures different angles of the company’s worth—earnings, book value, and enterprise value.
- Analysts noted that Dangote Cement is currently trading below its 5-year average P/E ratio, indicating the stock may be undervalued.
- The share price of the company is currently N440.
