Abdullah Al Othaim Markets Co.’s net income of SAR 99.6 million in the first quarter of 2020 came broadly in-line with Aljazira Capital and consensus estimates of SAR 95.2 million and SAR 84.4 million respectively.
The brokerage firm said in a research note that it expects the sales momentum to continue for the fiscal year 2020, driven by increased demand for essentials due to COVID-19.
“We estimate earnings per share (EPS) for FY2020 at SAR 4.66, as COVID-19 drives earnings growth in the short-term,” it noted.
The company also stands to benefit from increased retail demand, which would boost its growth in the long term.
Moreover, the brokerage expects the company’s strategy of continued expansion to bode well, enabling it to increase market share and capitalize on the growth opportunity.
Aljazira Capital downgraded Al Othaim from “Overweight” to “Neutral”, keeping the target price unchanged at SAR 92.50.
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