KEY POINTS
- NAHCO stock gained 46% in February, pushing its year-to-date return to 62%.
- Strong earnings growth, rising dividends, and healthy liquidity underpin the rally.
- Analysts warn the stock is now trading at a premium valuation despite solid fundamentals.
MAIN STORY
Shares of Nigeria Aviation Handling Company Plc (NAHCO) have surged by about 46 per cent in February 2026 alone, extending their year-to-date gain to approximately 62 per cent and drawing heightened investor attention in the equities market.
The rally follows a stellar 2025 performance, during which the stock delivered a 135 per cent return, positioning it among the best-performing equities on the Nigerian Exchange (NGX).
Market analysts say the recent price momentum appears largely supported by strong corporate fundamentals rather than speculative trading. Over the past five years, NAHCO has recorded consistent revenue growth averaging 66 per cent annually, while profits and earnings per share expanded by about 155 per cent and 158 per cent respectively.
Profit increased significantly from N302 million in 2020 to nearly N13 billion by 2024, while net profit margins improved from roughly 4 per cent to about 28 per cent in 2025, reflecting enhanced operational efficiency.
Dividend payouts have also risen sharply, growing at a compound annual rate of 163 per cent from 12.5 kobo in 2020 to N5.94 in 2024.
The company’s balance sheet shows strong financial health, with total assets of N53.9 billion backed by equity of N26.5 billion. Liquidity levels remain robust, with current assets exceeding liabilities and cash holdings reaching N11.2 billion, while borrowings remain modest at about N5 billion.
THE ISSUES
Despite strong fundamentals, the sharp rally has raised concerns about valuation levels and whether the stock is becoming overpriced amid rising investor expectations.
The issue comes against the backdrop of recent NGX warnings urging investors to avoid speculative trading and base decisions on verifiable corporate performance data.
WHAT’S BEING SAID
Market observers note that NAHCO’s rally is supported by active trading volumes and a relatively high free float of about 56.7 per cent, which reduces the likelihood of price manipulation by a small group of investors.
However, valuation metrics indicate the stock is now trading at a premium. Investors currently pay about N18.9 for every N1 of earnings—above the industry average of around N13.5—while enterprise value stands at roughly 12.2 times EBITDA.
Analysts say the stock’s low PEG ratio suggests the valuation could still be justified if the company maintains its strong earnings growth trajectory.
WHAT’S NEXT
Market watchers expect investors to closely monitor NAHCO’s upcoming financial performance to determine whether earnings growth can sustain current valuation levels.
Regulators are also likely to maintain heightened surveillance of unusual price movements across listed equities following recent market volatility.
BOTTOM LINE
NAHCO’s February rally appears largely driven by strong financial performance and liquidity, but with the stock now trading at a premium, future gains will depend heavily on sustained earnings growth.
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