Renaissance Capital Africa has issued a “Buy” recommendation on Aradel Holdings Plc, forecasting a potential 62.6% upside from a reference price of N640.20.
The projection was disclosed in the firm’s equity research report released on October 21, 2025, titled “Nigeria Oil and Gas: Recovery on the Horizon.”
In the report, Renaissance Capital set a target price of N1,040.90 for Aradel, reflecting confidence about the company’s growth outlook as reforms continue to reshape Nigeria’s oil and gas sector.
The analysts noted that recent Federal Government reforms are breathing new life into the oil sector’s value chain, with Nigeria’s crude production, which has remained below its OPEC quota of 1.5 million barrels per day since the pandemic, now beginning to recover.
In May 2025, President Bola Tinubu signed an Executive Order introducing a performance-based incentive system for oil producers.
- Under the new Upstream Petroleum Operations Cost Efficiency Incentives Order, companies that successfully reduce operating costs in onshore, shallow-water, and deep offshore fields can enjoy tax reliefs of up to 20% on their annual taxes.
This reform is one of the Federal Government’s efforts to boost the sector since the Petroleum Industry Act (PIA) was signed in 2021.
“Encouragingly, Nigeria’s active rig count has grown from 29 in January 2024 to 40 in September 2025, showing steady progress toward the 2 million barrels per day production target by FY26,” the firm stated.
Renaissance Capital also noted that Aradel is well positioned to benefit from this recovery.
Capitalizing on the benefits
Renaissance Capital analysts expect the oil and gas sector to improve, with Aradel and Seplat well positioned to benefit from current industry tailwinds.
“As an integrated company with refining capacity, Aradel is more tax-efficient under the Petroleum Industry Act (PIA) and delivered higher return on capital employed (ROCE) of 22% in FY24,” they stated.
The analysts also noted that Aradel’s dual role as both an oil producer and modular refinery owner gives it an advantage under the Domestic Crude Oil Supply Obligation (DCSO), which requires producers to supply part of their crude to local refineries.
By directing part of its output to its own refinery, Renaissance Capital noted that Aradel meets this obligation efficiently while also supporting its growth.
The Nigerian oil and gas sector has recently begun to gain positive sentiment in the financial markets, rising 8.31% in October, with Aradel participating in this trend.
Market trend
Aradel Holdings recorded a month-to-date gain of 9.24% in October and a year-to-date return of 12.34%, outperforming the NGX Oil and Gas Index, which is up 0.76% year-to-date.
The stock began 2025 at N598 but fell consecutively from January through early Q2, reaching a low of N448.00 in April.
From May, possibly driven by news of Federal Government reforms, the stock rebounded with an 18.3% gain.
Although it experienced minor declines in June and August, bullish momentum intensified in September, pushing the price above N600 to close at N615.
October has sustained this upward trend, with the stock rising 9.24% to N671.80 as of the close of trading on October 21, 2025.
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