MTN Nigeria, which has appreciated by 21% since the beginning of the year, is among the Nigerian Exchange Group’s (NGX) top performers in 2025.
Analysts claim that the federal government’s recent confirmation of a tariff hike drives MTN Nigeria’s stock performance.
The stock’s 2024 performance, which saw a 24 percent negative return, was sharply reversed by the 21 percent appreciation.
MTN Nigeria posted consecutive increases of 10 percent on January 8 and 9, raising questions concerning the motivations underlying this surge.
The stock had a similar bullish run in early January of this year, peaking at N295 on 9 January before a steep decline that saw it lose 38% of its value and fall to N183 by March 6.
The recent upswing makes many wonder if history will repeat itself or if a more solid path is in store.
Market signals indicate that the Nigerian Communications Commission’s (NCC) approval of pricing increases in the telecoms sector is the main factor fuelling the positive sentiment. Reports from within the NCC indicating an imminent approval of rate hikes spurred the rally in MTN Nigeria’s stock during the last days of 2024.
The bullish momentum on MTN shares sharply increased after the NCC formally announced the tariff rise, propelling the stock’s upward trajectory.
The price of MTN Nigeria’s shares has increased since December 23, 2024, from N178 to N242 on January 9. This demonstrates the stock’s strong upward momentum and puts it within striking distance of CardinalStone’s target price of N242.62.
Even without accounting for the possible effects of a rate increase, CardinalStone predicted a return to profitability for the telecom behemoth in its December 2024 report on MTN Nigeria. According to the research, MTN’s strategic 2024 initiatives, such as renegotiating its tower lease agreements, are responsible for this positive prognosis.Â
These changes laid the foundation for better financial performance by drastically lowering the USD component of its lease agreements from 55 to 60 percent to a more manageable 25 to 30 percent.
It is unclear if the trajectory would be maintained after laying the foundation for MTN’s growth. Since the stock is still well below the target price of N254.22, Meristem Stockbrokers predicts it will continue to rise.
