The analysts based their projections on expected substantial growth in the company’s full-year earnings for the period ending December 31, 2013 as well as its traditional dividend payment policy of reflecting improved earnings in dividend payout.
According to the analysts, a cursory look at the company’s profit margins reveals an increasing trend compared with the results at the corresponding quarter in 2012. Its profit before tax has gradually increased from N549.601 million in first quarter of 2013 to N3.084 billion by third quarter ended September 30, 2013 while profit after tax has also improved from N366.905 million to N2.088 billion during the same period.
“This suggests that the company has clearly out-performed the previous year both in top-line and should exceed its bottom-line performance at the current run-rate,” analysts stated.
The analysts noted that Conoil, which has been the toast of investors in recent weeks, could sustain its pricing trend and close the year around N72 per share, in spite of expected profit-taking on substantial gains in recent weeks.
According to the analysts, compared to its peers, Conoil’s earnings per share which measures the return on investments, is projected to rise to N4 for the full year 2013 based on the company’s previous quarterly performances, while price earning ratio (P/E) is projected to improved considerably.
“Consequently, an estimated market price of at least N72 per share will be achievable by the end of the full year 2013, taking into cognizance the performance of Conoil Plc and peer group comparison,” analysts noted.
They advised investors to invest in the stocks now ahead of a bountiful harvest in the nearest future noting that the company’s impressive performance was linked to its innovative means of manufacturing and distributing products as well as huge financial investments in developing high-performance products and in the provision of services that matched and surpassed international standards.
“Conoil has continually set new standards in fuel retailing with world-class facilities and groundbreaking marketing initiatives that endear it to customers and place it far ahead of competition. Conoil has grown an expansive distribution network throughout the country,” analysts stated.
Conoil has been one of the fastest rising stocks on the Nigerian Stock Exchange (NSE) in recent weeks as investors continue to respond positively to the company’s earnings reports.
It would be recalled that the company had promised that, barring any unforeseen circumstances, it would sustain the impressive performance achieved in the first half of this year, in the latter part of the year and meet its set targets, including juicier returns for shareholders.
To achieve its objective, the company said it had strengthened and repositioned its core businesses, with huge investments in retail network expansion, which involved building new multi-million naira mega stations spread across the country and located in high traffic areas in Onitsha (Anambra), Port Harcourt (Rivers), Makurdi (Benue), Jibia (Katsina), Jebba (Kwara) and Lagos, targeted at growing sales and revenue by over 65 per cent.
Chairman, Conoil Plc, Dr. Mike Adenuga, had during the company’s 43rd Annual General Meeting, also assured shareholders that the company remained committed to growing its business to maintain its leadership position in the downstream petroleum sector.