Staff Writer
Namibia Breweries Limited has been assigned a “hold” rating by Simonis Storm Securities, with a 12-month target price of N$26.10.
The firm said the current market price of about N$30.30 already reflects much of the company’s performance, leaving limited room for further gains. The outlook implies a negative return of about 6.1% when including a forward dividend yield of 7.8%.
The valuation is based on a discounted cash flow model, which places the company’s value at about N$24.70 per share. This is linked to a 16.0% weighted average cost of capital, based on Namibia’s long-term government bond yield of 11.23%. When peer comparisons are included, the valuation rises to about N$26.90.
The firm said the stock is fairly to slightly overvalued.
NBL’s operating performance improved during the 2025 financial year. Profit margins increased to 17% from 12.5%. This was supported by local production, changes to the product mix and improved efficiency. The shift to local production of cider and wine reduced reliance on imports and exposure to currency and logistics risks.
The company is moving from an investment phase to a harvest phase. Capital spending fell from N$547 million in 2024 to N$294 million in 2025 and is expected to decline further to N$121 million. This is supporting cash flow and dividends.
The company is paying out about 85% of earnings, with dividend yields expected between 8% and 10%. It reported a 26% return on net assets, improved cash generation and a balance sheet moving toward a net cash position.
The firm said risks remain in the near term. The minimum supply agreement with Heineken Beverages South Africa is set to expire on 30 April 2026. The agreement guaranteed annual volumes of 450 000 hectolitres. Supply in 2025 was below this level at 365 000 hectolitres.
The possible loss of this agreement is expected to affect earnings. A full loss could reduce earnings per share by 58 cents. The base case assumes a 25% drop in South African revenue, which could lead to an 8% decline in earnings in 2026.
