With the Nigerian Exchange (NGX) already up 4.9 percent in 2026 and market capitalisation firmly above the N100 trillion mark, some investment calls are beginning to play out faster than expected. Several stocks flagged for upside have already attracted strong buying interest, reflecting sustained optimism across the market.
In 2025, the NGX delivered a 51.2 percent return, driven by a handful of spectacular outperformers. NCR Nigeria led the charge with a 1,354 percent gain, followed by Eunisell, which rose 497 percent over the year. Consumer goods stocks dominated the leaderboard, and early indications suggest that risk appetite in 2026 remains intact. In this story, BusinessDay reviews the financial metrics behind stocks with compelling upside potential in the new year. One name that stands out is May & Baker.
Read also: May & Baker: The paracetamol giant to watch in 2026
Among healthcare stocks listed on the NGX, May & Baker (M&B) was not the sector’s top performer in 2025. Still, a 102 percent return over the year was far from ordinary. The stock’s performance only appears muted when viewed alongside the outsized rallies recorded by some pharmaceutical peers.
Neimeth Pharmaceuticals returned 153 percent in 2025, while Fidson Healthcare posted a striking 223 percent gain, placing both among the best-performing healthcare stocks on the exchange. Yet beneath the surface, May & Baker’s fundamentals tell a more compelling story. Based on its nine-month 2025 financials, BusinessDay is tracking meaningful upside potential for the stock, momentum that has begun to translate into early 2026 price action.
In the first eight trading days of the year, May & Baker’s share price jumped 67 percent, climbing from N19 to close at N31.65 as of January 12. The rally reflects renewed investor interest, underpinned by improving earnings quality, stronger margins, and attractive valuation metrics.
For the nine months ended 2025, May & Baker reported a net profit of N3.3 billion, representing a 77 percent year-on-year increase. Compared with peers such as Fidson, MeCure, and Neimeth, the company posted the highest net profit margin at 11.3 percent, highlighting superior cost discipline and pricing strength. Notably, the nine-month profit already exceeds the company’s full-year net income for 2024, pointing to a materially stronger earnings outcome for FY 2025.
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Segment data reinforces the quality of earnings. Pharmaceuticals accounted for over 98 percent of group revenue and profit, while the beverage segment remained marginal.
This concentration highlights May & Baker’s strength in its core pharmaceutical operations, particularly in branded generics and contract manufacturing, where margins tend to be more resilient.
May & Baker’s paracetamol, instantly recognisable by its distinctive red packaging, has dominated Nigeria’s analgesics market, especially with the exit of GSK’s Panadol. For investors, buying into M&B is effectively a bet on the enduring strength of its brands and their ability to retain market leadership across cycles.
The balance sheet also tells a story of growing resilience. Total assets expanded to N25.8 billion as of September 2025, up from N22.5 billion at the end of 2024. Cash and cash equivalents rose sharply to N5.4 billion, compared with N3.2 billion at full-year 2024, providing stronger liquidity and operational flexibility. Retained earnings increased to N8.26 billion, reflecting profit accumulation even after dividend payments.
While borrowings increased, the rise was largely offset by higher earnings and stronger operating cash flows. Net cash from operating activities stood at N1.87 billion for the period, underscoring the company’s ability to convert accounting profits into cash. This matters in a high-interest-rate environment, where leverage without cash generation can quickly erode equity value.
Read also: May & Baker profit climbs 77% to N3.34bn as revenue outpaces costs
Despite these improvements, valuation remains undemanding. At a price-to-earnings ratio of about 14.6 times, May & Baker trades at a discount to most healthcare peers on the NGX. Its price-to-book ratio of 3.88 times also appears conservative when set against a return on average assets of 13.9 percent, the highest in the sector during the nine months.
Dividend yield remains the key restraint for income-focused investors. In 2025, the stock offered a yield of about 3 percent, which is modest by broader market standards. Still, at current earnings levels, a potential dividend of N1 per share would mark a 150 percent increase over the 40 kobo paid for 2024. This points to a growing capacity for stronger shareholder returns over time.
In a market increasingly driven by earnings durability rather than headline rallies, May & Baker’s improving fundamentals stand out. The company’s recent price action appears less like a short-term spike. Instead, it increasingly resembles a valuation re-rating already underway.