NCBC ‘overweight’ on Saudi Telecom; TP at SAR 82.8

NCB Capital (NCBC) said it remains “overweight” on Saudi Telecom, despite its lower-than-expected set of results.

It remained “our top pick in the telecom sector supported by a strong balance sheet and attractive dividend yield of 5.6 percent,” the investment firm added.

NCBC set a target price of SAR 82.8 per share on the stock.

STC’s Q2 net profit fell nine percent to SAR 2.5 billion, 13 percent below NCBC’s estimates and 18 percent below consensus. The drop was mainly due to lower-than-expected revenue growth at 4.3 percent year-on-year, weaker margins, and a SAR 153 million decline in other income and expenses, it said in a note.

However, adjusting for the one-off expense, net income declined by 4.8 percent year-on-year, the note said.