Falcom slashes STC’s target price to SAR 104 per share

Falcom Financial Services has revised the target price of Saudi Telecom Co. (STC) to SAR 104 per share from 111.30, and maintained the ‘neutral’ recommendation.

The brokerage firm said in a research note that it expects the company to post a net profit of SAR 11.22 billion in 2019, with a revenue amounting to SAR 54.26 billion.

Falcom added that STC continues to focus on enabling digital transformation in line with Saudi Vision 2030, through investing into innovative solutions for digital payments, big data, cloud computing, Internet of Things (IoT) and artificial intelligence (AI).

“Such efforts prepare the company to face global challenges in the telecom industry, which continues to face heightened competition,” the brokerage firm stated.

In June 2019, the sector overall witnessed a rise in fixed telephony, mobile and broadband subscribers, while the number of mobile subscribers dropped, it added.

Falcom also highlighted that Mobile Telecommunications Company Saudi Arabia (Zain Saudi), a key competitor, launched in October 2019 commercial 5G operations in Saudi Arabia at competitive rates with a plan to cover 26 cities and utilize 2,600 towers by the end of 2019.