Honeywell Flour Mills stock surges 9.8% on strong trading volume

NIGERIA – Honeywell Flour Mills Plc (HFM), one of Nigeria’s leading flour milling companies and a subsidiary of the Flour Mills of Nigeria has witnessed a significant price surge of approximately 9.8% on March 7, 2025, as its stock climbed from N12.25 to N13.45 (US$0.033 to US$0.036).

This uptick has sparked investor interest and signals renewed confidence in the consumer goods sector.

The trading session on March 7 saw an exceptionally high volume of nearly 10 million shares, marking the highest activity in the past week.

This surge in trading volume indicates strong accumulation, which set the stage for the stock’s price increase. Before this rebound, HFM’s stock had dipped from N13.70 to a low of N11.50, reflecting a volatile but potentially recovering market trend.

According to data from the Nigerian Exchange, between 10 and 14 February, Honeywell Flour Mills’ stock surged by 47.1% week-on-week, rising from US$0.0063 to US$0.0093.

The company’s stock saw consecutive price increments for five trading sessions. The all-week impressive price shift moved its market value to US$73.6M, spread over 7.930 billion outstanding shares.

The company was valued at US$50M before the rally began and gained US$23.5M in five trading sessions.

Honeywell Flour Mills reported a revenue of N277.1 billion (US$692 million) for the nine months ending December 31, 2024, a staggering 123% increase from N124 billion (US$310 million) in the same period the previous year.

Despite a rise in selling and administrative expenses, which increased to US$5.9M from US$2.7, the company’s gross profit rose to US$18.9M from US$15.5M in the prior year.

Finance costs declined by 58% to US$2.6M from US$6.2M, while finance income increased to US$1.8M from US$729,563. 

Despite this impressive revenue growth, the company posted a loss of N10.12 billion (US$25.3 million) in its audited full-year 2024 results.

Market analysts suggest that HFM’s stock remains undervalued, as it is currently trading well below its estimated fair value of N82.74 (US$0.21). However, its Price-to-Earnings (P/E) ratio of 12.4x is slightly higher than the industry average of 11.7x, which could indicate cautious investor sentiment despite the stock’s recent surge.

Year-to-date, HFM’s stock has performed exceptionally well, beginning the year at N6.30 and nearly doubling to its current level—an impressive 98.7% increase. This sustained growth suggests strong market confidence and hints at potential further upside.

Broadstreet market analysts have noted that continued buying interest could drive the stock even higher. “The recent 9.8% increase highlights robust market confidence and the possibility of additional gains as positive trends continue,” analysts said.

Investors are closely watching HFM’s financial performance and broader market conditions, as the company’s recent stock movements and financial disclosures present both opportunities and risks in the consumer goods sector.

According to analysts, the coming weeks will be crucial in determining whether Honeywell Flour Mills can sustain its momentum or if market fluctuations will impact its upward trajectory.

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