Here's what drives MTN Nigeria's rally

In 2025, MTN Nigeria has been one of the outstanding performers in the Nigerian Exchange, appreciating by 21 percent since the start of the year.

This marks a sharp turnaround of the stock’s 2024 performance that saw it suffer a 24 percent negative return.

Since December 23, MTN Nigeria’s share price has surged from N178 to close at N242 on January 9.

This brings the stock within striking distance of CardinalStone’s target price of N242.62, highlighting its strong upward momentum.

On January 8 and 9, MTN Nigeria recorded consecutive 10 percent gains, prompting questions about the drivers behind this rally. Could this signal a sustained recovery for MTN investors, or is it a repeat of 2024’s pattern?

Indications from the market show that the primary driver of the bullish sentiment is the approval of tariff hikes in the telecommunications sector by the Nigerian Communications Commission (NCC).

The rally in MTN Nigeria’s stock during the final days of 2024 was fuelled by reports from within the NCC suggesting an impending approval of tariff hikes.

Once the NCC officially announced the tariff increase, the bullish momentum on MTN shares accelerated significantly, driving the stock’s upward trajectory.

Last year, the stock experienced a similar bullish surge in early January, reaching a peak of N295 on January 9, only to reverse sharply, losing 38 percent of its value and plummeting to N183 by March 6. The current rally raises speculation about whether history might repeat itself or if a more stable trajectory lies ahead.

At the moment, the FY 2024 financial results have not been released to provide insights into the fundamentals driving the performance of MTN Nigeria in the market. However, news and stories from the telecommunication sector are driving a bullish sentiment towards the stocks.

In its December 2024 report on MTN Nigeria, CardinalStone projected a return to profitability for the telecom giant, even without factoring in the potential impact of a tariff hike.

The report attributed this optimistic outlook to strategic measures implemented by MTN in 2024, including the renegotiation of its tower lease contracts.

These adjustments significantly reduced the USD component of its lease agreements from 55–60 percent to a more manageable 25–30 percent, laying the groundwork for improved financial performance.

After establishing the groundwork for MTN’s surge, it remains to be seen whether the trajectory would be sustained. According to Meristem Stockbrokers, the stock is tipped to continue its surge, as the stock is still quite off the target price of N254.22.