Riyad Capital said that Yanbu National Petrochemical Company’s (Yansab) net profit of SAR 316 million for the second quarter of 2019 is below its expectations and the market consensus estimates of SAR 344 million and SAR 401 million, respectively.
It added that margins deteriorated significantly from their distinctively high levels, which is “likely to put pressure on the stock price”.
Riyad Capital also said that the company still remains a strong FCF generator allowing for “handsome dividends” and an elevated price floor for the stock.
The company maintained its “neutrality” recommendations for the Yansab’s stock, and lowered its target price from SAR 74 to SAR 65.
The neutrality recommendation, according to Riyad Capital, means that the expected total return per share will be between +15 per cent and -15 percent.
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