MTN Nigeria has emerged as one of the standout performers on the Nigerian Exchange Group (NGX) in 2025, with its stock appreciating by 21% since the start of the year.
Analysts attribute this stellar performance to the recent approval of a tariff hike by the Nigerian Communications Commission (NCC), a move that has bolstered investor confidence in the telecommunications giant.
The 21% rally marks a sharp recovery from MTN Nigeria’s challenging 2024, where the stock recorded a 24% negative return.
Notably, on January 8 and 9, the stock saw consecutive 10% gains, sparking discussions about the factors driving this impressive rebound and whether it signals a sustainable upward trajectory.
Market watchers point to the approval of tariff hikes as the primary catalyst for MTN’s stock surge. The rally gained momentum in late 2024 following reports that the NCC was on the verge of approving an increase in telecommunications tariffs.
This speculation turned into certainty when the tariff hike was officially announced, leading to a significant bullish sentiment around MTN’s shares.
Since December 23, 2024, MTN’s stock price has climbed from N178 to close at N242 on January 9, 2025. This brings it close to CardinalStone’s target price of N242.62.
The firm’s December 2024 report projected a positive outlook for MTN Nigeria even without the tariff hike, citing strategic financial adjustments made by the company.
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These measures included renegotiating tower lease agreements to reduce the USD component from 55%-60% to 25%-30%. This move has minimized the impact of exchange rate volatility and positioned the company for stronger financial performance.
The current rally has drawn parallels to a similar bullish phase in early 2024 when MTN’s stock peaked at N295 on January 9 before plummeting 38% to N183 by March 6. This historical precedent has prompted speculation about whether the current gains will endure or face a similar reversal.
However, analysts argue that 2025 presents a more solid foundation for MTN’s stock. Meristem Stockbrokers projects that the stock, which is still below its revised target price of N254.22, has room for further appreciation.
CardinalStone Partners: The investment firm maintains that MTN’s strategic adjustments, coupled with the tariff hike, provide a strong basis for profitability. “The company’s efforts to reduce exposure to exchange rate risks have created a more sustainable cost structure,” the firm noted in its December report.
Meristem Stockbrokers: The brokerage predicts continued upward momentum for MTN’s stock, citing favorable market conditions and the recent tariff adjustment as critical drivers. “The stock is still undervalued relative to its growth potential, and we anticipate further gains,” a Meristem representative stated.
Stanbic IBTC: A cautious outlook was presented by Stanbic IBTC analysts, who warned that while the current rally is promising, market volatility and macroeconomic factors could pose challenges. “Investors should remain vigilant about potential headwinds, including exchange rate fluctuations and inflationary pressures,” the firm advised.
MTN’s recent performance has rekindled optimism among investors, signaling a potential turnaround for the telecom sector. Market participants are closely monitoring the company’s next moves, including its ability to sustain revenue growth and navigate regulatory landscapes.
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Civil society groups have also weighed in, urging the NCC to ensure that tariff hikes do not disproportionately impact consumers. “While MTN’s growth is commendable, regulatory bodies must strike a balance to protect consumer interests,” a consumer advocacy group said.
As MTN Nigeria continues its upward trajectory, the key question remains: can the telecom giant sustain this momentum or will it face a repeat of its early 2024 reversal?
Analysts agree that the company’s strategic initiatives and tariff hike provide a solid foundation for growth, but caution that external economic factors could influence the stock’s long-term performance.
For now, MTN Nigeria’s strong start to 2025 positions it as a key player to watch on the NGX, with its performance likely to shape investor sentiment in the telecommunications sector.