Riyad Capital maintains ‘buy’ rating on Yamama Cement; cuts TP to SAR 62

Riyad Capital said that it has maintained its “buy” rating  on Yamama Cement Co. and cut the stock’s target price to SAR 62.

The recommendation comes after Yamama reduced its selling price from SAR 244 to SAR 227. However, the brokerage firm said the stock is still attractive due to higher earnings forecast for 2016-2018; as well as a stable dividend payout, clean balance sheet, and higher book value.

Meanwhile, the relocation of Yamama's plant fuels concerns that additional expenses will weigh on earnings in the near term, the investment firm added. 

The move should, however, help improve production and cost savings on the long-term.