Analysts at CardinalStone have assigned a “buy” rating to shares of Nigerian Breweries Plc, citing operational improvements and a stronger balance sheet.

The recommendation was detailed in their equity report published on August 21, 2025, titled “Nigerian Breweries Plc: Pricing in the Recovery.”

The analysts pointed to the company’s strong rebound in the first half of 2025 as a major factor behind their stance, with earnings per share rising to N2.85 compared to a loss of N8.28 in 2024.

While overall volumes eased slightly, CardinalStone expects festive demand, product innovations, and management’s efforts to defend market leadership to lift revenue to N1.51 trillion in 2025, up from N1.08 trillion in 2024.

On innovation, they highlighted the launch of a new 45cl Heineken pack designed to strike a balance between affordability and premium positioning, which they believe will drive volume growth.

Supported by operational efficiencies and a more stable FX outlook, CardinalStone set a target price of N80.62 for the stock, up from a reference price of N68.30, an implied upside of 18%.

Nigerian Breweries delivered stronger efficiency gains in the first half of 2025, with its cost-to-sales ratio improving to 57.9% from 66.7% a year earlier and well below its five-year average of 64.9%.

The brewer said the progress was driven by easing inflation, a more stable exchange rate, and ongoing cost-saving efforts, including the switch from gas to solar energy at some breweries and increased local sourcing of raw materials, with nearly all packaging now produced in Nigeria.

It expects further savings from streamlining its distribution network, which should lower logistics costs and support growth across product segments.

NB boosted its balance sheet after a rights issue that raised Heineken N.V.’s stake to 72.9% from 56.7%.

Management said this position was maintained in 2025, helping NB post a N7.3 billion FX gain in H1.

With debt at multi-year lows and earnings improving, the brewer is now in a stronger position to manage costs, protect profits, and stay financially flexible through the year.

Nigerian Breweries has maintained a bullish run in 2025 after struggling in the Nigerian stock market throughout 2024.

The stock opened the year at N32 and closed January higher at N35.80.

Although the rally slowed in February and March, momentum picked up strongly in April following the company’s Q1 results, which showed a pre-tax profit of N69.9 billion compared to a loss of N65.5 billion in Q1 2024, driven largely by reduced FX losses.

Investor sentiment strengthened further in May and June, bringing the first-half performance to over 84%.

In Q3, the stock surged by over 30% in July to close at N77.05.

Year-to-date, Nigerian Breweries shares have gained more than 112%.

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