Analysts at CardinalStone are forecasting a return to dividend payments for Guinness Nigeria Plc in the 2026 financial year.
This outlook was detailed in the firm’s recently released equity research update titled “Resilient earnings recovery supports dividend resumption in FY’26.”
According to the report, retained earnings are expected to return to positive territory in 2026, paving the way for dividend payments, with a projected 50% payout ratio slightly below the five-year average of 62.8%.
Highlighting the earnings outlook, the analysts noted: “Even under moderate payout assumptions, retained earnings are projected to close FY’26 at N33.9 billion, supporting an estimated dividend per share of N8.7 for the year.”
The firm also revised its 12-month target price for Guinness shares to N204.63 from N181.38, while maintaining its BUY rating on the stock.
CardinalStone credits its positive outlook to improving earnings momentum, notably stronger gross profit and operational performance, along with better working-capital management and consistent investment over recent quarters.
Positive fundamentals
According to CardinalStone, Guinness Nigeria is set to deliver a stronger performance in Q4 2025 compared with Q2 2023/24.
Analysts project higher profitability, with gross, EBIT, and net margins expected to rise to 37.5%, 17.6%, and 10.5%, respectively, up from 33.5%, 13.6%, and 8.9% in the comparable period.
- The anticipated improvement is supported by festive-season demand, wider market reach, lower sorghum prices—which have fallen nearly 26% year-on-year—and an expected 10% appreciation of the naira.
Following the Tolaram acquisition, analysts highlight a sustained increase in investment in property, plant, and equipment, reflecting management’s focus on efficiency gains and capacity expansion.
- While no formal guidance was issued, management reaffirmed its commitment to continued capital spending, leading analysts to maintain their Capex intensity estimate at 6.5%.
The company’s working-capital structure is also set to evolve.
- Guinness had previously relied heavily on Diageo, its former parent, during periods of tight FX liquidity, pushing trade payables to N175.0 billion in FY’23/24 and extending payable days to 309.
- With the change in ownership and improved FX conditions, management plans to gradually reduce payables and limit foreign-currency exposure, with analysts projecting average payable days of 124 over the next five years.
Investor sentiment appears to have strengthened on improving fundamentals, with Guinness Nigeria shares gaining 181.85% year-to-date in 2025.
Market trend
Guinness Nigeria started 2025 at N70.25 on the NGX, recovering slightly from a March 2024 low of N49.60.
The stock closed January 2025 at N77 but slipped to N74 by the end of February. Momentum picked up in March, with the stock steadily climbing in the following months to record a half-year gain of 25.27%.
The second half of the year has proved even stronger, with a 33% gain in July followed by further growth in August, pushing the stock to N130. By September, it had surged over 41% to N183.9.
Although consecutive declines in October and November brought the price down to N167, a correction in early December has lifted the stock to N198, resulting in a gain of 181.85% year-to-date.
