Rating Summary:

We revise our rating on TotalEnergies Marketing Ghana Plc to “REDUCE” from “SELL”, raising our fair value estimate by 19.4% to GHS 36.83 per share to reflect anticipated revenue support from infrastructure demand, bitumen sales, and tax relief measures. We expect Ghana’s “Big Push” road construction programme to lift demand for transport and logistics services, driving higher diesel and petrol consumption and supporting ancillary revenue from maintenance-related fuels, lubricants, and bitumen. These factors underpin our forecast revenue growth of 12.0% y/y to GHS 7.4bn in FY2026, reversing the 6.0% y/y contraction in FY2025 and implying a five-year average growth rate of 10.2%. While this trails the historical five-year average of 22.5%, the gap reflects a distortion in FY2022, when revenue surged 76.2% y/y despite a 4.9% y/y decline in volumes, largely due to price effects; excluding FY2022, historical average growth moderates to 8.5%, below our forecast 10.2%.

The outlook also benefits from tax measures, including the reduction in the effective VAT rate from 21.9% to 20% and restored access to 5.0% input tax credits, which partially mitigate consumer cost pressures and reduce the impact of the GHS 1.0 per litre energy sector levies. At a current P/E of 13.7x, above the peer average of 12.0x, the stock trades at a premium, and despite the upward revision, our fair value remains 8.36% below the current market price of GHS 40.19, constraining upside and supporting our REDUCE rating. We derive our fair value using a blended valuation approach comprising DCF (40%), EV/EBITDA (40%), and DDM (20%), underpinned by a 15.01% risk-free rate, a WACC of 18.9%, and a terminal growth rate of 5.0%.