SABIC Receives “Overweight”⁣ Recommendation⁢ from ‍Al-Ahli Capital

Al-Ahli Capital has⁤ issued a new report⁤ on SABIC, recommending an “overweight” ‌position ⁢with a target price ⁣of 87.3 riyals per share. This target price ‍represents a premium of ​around 16% compared to ⁢the previous ‍day’s closing price of 75.5 riyals.

The recommendation⁣ is based on the ⁢improving demand and better price⁤ dynamics for SABIC’s end products in the petrochemical sector. Despite surplus production remaining ‌a challenge, ‍Al-Ahli Capital believes⁢ that companies with a strong budget​ and diversified portfolio of products and ‌feedstocks will outperform their‍ peers.

SABIC’s strong financial position and diversified⁢ portfolio ​make it the company ‌of choice in the ‍sector, ⁣according to⁣ Al-Ahli Capital. The company recently announced an 85%​ year-on-year increase in second-quarter profits, ⁢reaching 2.2 billion riyals.

Al-Ahli Capital‌ expects SABIC’s ⁤full-year profit ‍to reach 6.1 billion riyals in ‌2024, followed⁢ by 10.9 billion in ‌2025. This represents a⁣ significant⁣ improvement compared to the loss recorded in ‍2023. ‌The company’s future ‍earnings multiple for⁢ 2025 is‍ estimated at 20.9 times, ⁢higher than the sector average⁤ of ⁤13.5 times.