Itqan Capital says Almarai Q3 revenue in-line with estimates, maintains ‘neutral’ rating

Itqan Capital said that the revenues of Almarai Co. in the third quarter of 2020 were in-line with its expectations.

The growth in foodservice channels following the easing of restrictions provided Almarai with some relief during the quarter, allowing the company to maintain strong momentum in Q3 2020.

The brokerage noted that Almarai showed resilience in the time of the pandemic, but will have to go through price adjustments and product realization post-value-added tax (VAT), which might negatively impact demand.

Almarai’s is still maintaining its strict Capex spend in-line with the current capacity, limiting the Capex budget to maintenance. Furthermore, the company has sufficient cash in hand and requires no additional funding until year-end.

Itqan Capital maintained its “neutral” recommendation on the stock, keeping the target price unchanged at SAR 49 per share.