Nestle Nigeria Q2 2025 – Sustained Revenue Growth and Lower FX Losses results in Strong Bottomline

Event

Nestle Nigeria Plc (“the Group”) delivered a strong comeback in Q2 2025, posting results that underline both improved operating resilience and disciplined financial restructuring. Revenue grew by 28% year on year to N286.23 billion, compared to N223.49 billion in Q2 2024. Although this performance looks moderate against the unusually high 67% topline surge in Q2 2024, it is important to note that the 2024 growth was largely inflated by steep price increases implemented to offset soaring input costs during a period of high inflation. The Q2 2025 performance reflects a more sustainable growth path, built on stable consumer demand and robust product performance.

Outlook

On valuation, we revised our fair value estimate upward to N2,520.31 (from N2,083.18 previously). At the current market price of N1,870.00, this implies a total return potential of 36% inclusive of dividends. Furthermore, our forecasted forward P/E multiple of 12.40x remains significantly below its historical average of 24.13x, highlighting that the market is yet to fully price in the earnings rebound. This undervaluation presents an attractive entry point for long-term investors seeking exposure to a company with renewed growth visibility and improving fundamentals. Accordingly, we maintain our BUY recommendation.

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