Transcorp gets 27.5% upside ‘Buy’ from CardinalStone  

Analysts at CardinalStone Research have issued a “Buy” rating on Transnational Corporation Plc (Transcorp), projecting a 27.5% upside potential in 2025.

In their equity research report titled “Strong Macros to Support Earnings,” the analysts estimated that Transcorp’s share price could rise from a reference price of N49.00 to a target price of N62.47.

According to the report, the Federal Government’s phased N4.0 trillion debt-refinancing plan could be a turning point for the power sector, easing funding pressures, improving GenCos’ cash flow, and rebuilding investor confidence.

Such confidence, the report noted, is important for a sector still burdened by persistent liquidity challenges, which have continued to weigh investment and supply reliability despite ongoing reforms.

For Transcorp, the analysts identified the debt-refinancing plan as a key upside catalyst, suggesting that a debt clearance could significantly reduce receivables, improve liquidity, and support the company’s ongoing power capacity expansion.

• Looking ahead to Q3 2025, CardinalStone expects Transcorp’s revenue to sustain strong growth, driven by higher generation output and continued execution of its hospitality strategy.
• The firm added that the summer months extending into Q3 likely boosted occupancy levels and leisure activity, providing additional momentum for top-line growth in the company’s hospitality segment.

These projections come on the back of a strong first half of 2025, during which Transcorp reported a pre-tax profit of N85.6 billion, representing a 20.84% year-on-year increase.

Performance: 

Transcorp delivered a strong performance in the first half of 2025, supported by solid growth across its key business segments.

An analysis of the financials shows that the impressive results were largely driven by revenue growth, particularly from the power segment.

• Total revenue rose by 59.43% year-on-year to N279.6 billion, already representing 69% of the full-year 2024 figure.
• Energy sent out accounted for the majority of revenue at N183.5 billion, while capacity charges added N48.5 billion.
• In the hospitality segment, room revenue stood at N31.3 billion; food and beverages contributed N13.6 billion, and other services made up the balance.

Higher revenue growth compared to the cost of sales supported a healthy gross profit margin of 46.81%.

On the balance sheet, total assets grew by 20.7% to N907.3 billion, while retained earnings rose to N140.9 billion from N112.3 billion.

Transcorp’s stock is currently experiencing a mild pullback, likely presenting a potential buying opportunity for investors looking to take advantage of its long-term growth outlook.

Market trend: 

Transcorp, currently trading at N46.10, is attempting to recover from its 2025 low of N43.10 recorded in May, a level where investors could consider entering if fundamentals remain supportive.

The stock opened the year at N43.50 and quickly climbed to N57 in February before a pullback in March pushed it down to N44.40. By May, it had slipped further to N43.10.

From June, a mild bullish trend emerged, helping the stock rebound despite an August dip, reaching N49.90 in September. However, early October weakness has once again pulled it back to the N46 range.

According to analysts, if the company delivers strong Q3 earnings, it could incite fresh bullish momentum into the stock and support a renewed upward move.