Renaissance Capital Africa (RCA) has raised its valuation of Dangote Petroleum Refinery and Petrochemicals FZE to N700.41 per share, representing a 33.4% premium to the N525 IPO offer price.
The upward revision follows stronger-than-expected earnings for the nine months ended September 2026, as the refinery’s revenue, earnings before interest, taxes, depreciation and amortisation (EBITDA), and net profit exceeded the investment firm’s estimates.
This is according to a company update dated October 16, 2026, titled “Stronger refining margins drive earnings outperformance.”
The new valuation represents a 13.1% increase from RCA’s earlier estimate of N619.47 per share and implies an equity value of $63 billion based on 120.13 billion existing shares.
However, after accounting for net IPO proceeds of N2.11 trillion and 4.1 billion new shares, RCA’s valuation stands at N694.28 per share, representing a 32.2% premium to the offer price.
Dangote Refinery reported a net profit of $4.73 billion for the nine months ended September 30, 2026, reversing a net loss of $117.2 million recorded in the corresponding period of 2025.
Net profit exceeded RCA’s estimate of $2.82 billion, while the refinery’s financial position improved from net debt of $1.73 billion a year earlier to net cash of $650.8 million.
The company reported cash holdings of $6.69 billion during the period.
RCA said the earnings outperformance was largely driven by the third quarter, when revenue reached $8.57 billion, 19.7% above its estimate.
Cash operating costs of $5.65 billion were within 0.2% of RCA’s estimate, suggesting that improved refining margins, rather than lower operating costs, were the main driver of the stronger performance.
However, RCA noted that crude oil cost lags and hedging activities may also have contributed to the results.
RCA attributed the refinery’s earnings outperformance to a sharp increase in refining cracks during the third quarter, particularly across the Atlantic Basin.
US Gulf Coast jet fuel and gasoil cracks averaged $75.59 and $72.57 per barrel, respectively, compared with $56.40 and $44.40 in the second quarter.
RCA noted that about 88% of the refinery’s June jet fuel output exceeded Nigeria’s domestic demand and was sold to international buyers. The firm also said Dangote Refinery reported that it was Europe’s largest jet fuel supplier in July and August.
Following the stronger results and improved refining margins, RCA raised its full-year 2026 gross refining margin forecast to $35.81 per barrel from $27.55.
The investment firm also increased its revenue forecast by 7.4% to $30.24 billion and raised its EBITDA projection by 34.6% to $7.24 billion.
The firm said only about 8.5% of the N80.94 per-share increase in its valuation came from changes to its 2026 forecasts. The remaining increase reflected the refinery’s net cash position, a later valuation date and adjustments to exchange-rate and discount-rate assumptions.
At the N525 offer price, RCA estimated Dangote Refinery’s pre-listing market capitalisation at N63.07 trillion, equivalent to $47.22 billion at an exchange rate of N1,335.50 to the dollar.
Management estimates cash operating costs at between $2.40 and $2.50 per barrel.
RCA’s base-case valuation assumes the refinery’s second train will be commissioned in January 2030, increasing capacity from about 700,000 barrels per day to approximately 1.4 million barrels per day.
The firm cautioned that the refinery’s latest results announcement provided headline financial figures without details on production volumes, realised prices or a breakdown of costs below EBITDA.
It said it would revisit its estimates when the full nine-month accounts are published.
RCA identified refining margins, taxation and foreign exchange movements as key factors that could affect its valuation.
Foreign exchange movements also pose a risk. RCA estimated that every 1% movement in the naira would change its naira-denominated valuation by approximately N7 per share.
The report stated that it was for information purposes only, was not independent investment research and did not constitute a recommendation to buy or sell securities.
