Itqan Capital raised its recommendation on Saudi Basic Industries Corp. (SABIC) to ‘Neutral’ from ‘Underweight’, while also increasing the target price (TP) to SAR 90.10 per share from SAR 77.40.
SABIC showed significant recovery on a quarterly basis in Q3 2020 on the back of price improvement as well and an increase in volumes sold, the research firm said in a recent report.
However, it added that despite resumption of some business activities, it is expected that the oversupply in SABIC's key products will further pressure product prices and margins towards the end of 2020.
“We expect that SABIC's weak performance to have bottomed out in Q2 2020,” the report said.
“Meanwhile going into 2021, SABIC is expected to benefit from demand recovery, given that the global pandemic has brought to the forefront the significant role that plastics play, particularly in safeguarding against COVID-19 on medical frontlines,” it added.
Itqan Capital expects SABIC to report a net loss of SAR 531 million in financial year 2020, while the petrochemical major is forecast to post a net profit of SAR 6.3 billion in 2021, and a net profit of SAR 10.2 billion in 2022.
Itqan Capital expects SABIC to distribute cash dividends for the second half of 2020 at the same levels as the first half of the year at SAR 1.5 per share.
Comments {{getCommentCount()}}
Be the first to comment
رد{{comment.DisplayName}} على {{getCommenterName(comment.ParentThreadID)}}
{{comment.DisplayName}}
{{comment.ElapsedTime}}