Aljazira cuts City Cement’s TP to SAR 23.20

Aljazira Capital maintained its “overweight” rating on City Cement, but cut its target price to SAR 23.20 a share from SAR 27 on lower-than-expected operating profit and lower sales prices.

“The company is witnessing a decline in sales price per ton in 1H-2015, however, strategic location and new production line to boost sales,” the brokerage arm of 

Aljazira Bank said in research note on Sunday.

City Cement’s second quarter added 9.7 percent year-on-year to SAR 78.25 million on an increase in volume sales after the commercial production began at 

the second line.  

The adjusted share target price indicates a potential upside of 27.80 percent over the current market price of SAR 18.15 a share, Aljazira added.

The company is trading at an attractive PE with an expected dividend yield of about 6.8 percent, it said.