Cordros Securities, in its updates on TotalEnergies Marketing Plc nine months 2026, maintained its sell recommendation
This report’s updated outlook and revised estimates for TOTAL follow the release of its 9M-26 results, which showed revenue increased by 12.6% y/y in 9M-26, supported by stronger pricing amid elevated crude oil prices.
Profitability also benefited from a 36.6% y/y reduction in net finance costs. Following our review, we raise our target price by 24.7% to NGN424.68/s (Prev.: NGN340.57/s) while maintaining our “SELL” recommendation.
The revised target price reflects expectations of a steeper decline in finance costs of 30.8% y/y (Prev.: -21.9% y/y) as reliance on overdraft funding continues to ease. “We forecast a 2026E DPS of NGN11.43, implying a dividend yield of 2.2% at the current share price of NGN518.40/s. Based on our estimates, TOTAL trades at a 2026E EV/ EBITDA of 5.6x, below the MEA peer average of 10.5x. However, its 2026E P/E of 22.2x represents a substantial premium to the peer average of 16.2x” said Cordros.
Earnings recovery on improved margins and lower finance costs: We maintain our 2026E revenue growth forecast at 15.3% y/y, with a higher contribution from product pricing following the upward revision to our Brent crude price assumption. We now project a 2026E average PMS price of NGN1,293.07/litre (Prev.: NGN1,225.01/litre), based on an average Brent crude price of USD94.00/bbl (Prev.: USD87.00/ bbl), a PMS landing cost of USD0.90/litre or NGN1,194.49 (Prev.: USD0.85/litre or NGN1,173.57), and an average exchange rate of NGN1,380.00/USD. However, we revise our volume growth forecast downwards to 0.3% y/y (Prev.: +2.8% y/y), as higher product prices weigh on consumption and market share losses from the competitive pricing environment in 2025 have yet to fully reverse.
Nonetheless, we still expect revenue growth to outpace COGS growth of 13.6% y/y (Prev.: +13.5% y/y) and a 4.2% y/y rise in operating expenses (Prev.: +9.4% y/y), driving EBITDA margin expansion of 160bps y/y to 4.1% (Prev.: +110bps to 3.6%).
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