Falcom maintains ‘Neutral’ on Savola, raises TP to SAR 32

Falcom Financial Services maintained its “Neutral” recommendation on Savola Group on its mixed performance.

It also increased the stock’s target price to SAR 32 per share, the brokerage firm said in a research note.

“Savola’s strength in the performance of retail segment was a result of the management’s continuous focus towards turnaround initiatives to boost top-line growth,” the note said.

The company benefitted from like-for-like growth in consumer count and basket size. The number of store count in this quarter remained flat at 207.

“However, the foods segment’s performance remains a major concern as volume of edible oil remained subdued primarily due to weak demand from Central Asia. However, profitability improved owing to lower-than-expected operating costs,” it noted.