Al Rajhi Capital upgrades Al Hammadi Hospitals to Overweight

Al Rajhi Capital has upgraded the rating of Al Hammadi Hospitals to “overweight” (from under review earlier), while maintaining a target price of SAR 27, the brokerage firm noted in report on Monday.

“We expect the pharmaceutical revenue and healthy improvement in utilization of Nuzha (especially after the company have signed with major insurance players) continue to accelerate the top-line growth, while expenses related to Nuzha hospital are likely to be normalized,” the report noted.

“Al Hammadi was able to diversify its revenue, which we believe is a positive move by the management.

Further, the elevated level of receivables is not a concern for the company as most of the government receivables is likely to be realized in Q4,” the report said.

The brokerage firm has maintained a target price of SAR 27 on the stock, implying an upside of 13.1 percent.