AlJazira Capital initiated coverage of Dr. Sulaiman Al Habib Medical Services Group, placing a 'Neutral' recommendation on the stock and setting its target price (TP) at SAR 89 per share, which implies a downside potential of 6.9% from its current market price.
The medical services provider leads Saudi Arabia's healthcare private sector, said AlJazira Capital, adding that its multiple capacity expansion plans are likely to consolidate its leadership position, supported by strong balance sheet.
It further said that the group offers a compelling investment opportunity from a long-term perspective.
However, AlJazira Capital indicated that, even though the company has strong fundamentals, supported by ambitious growth plans, most of the positives seem to be factored in the current price. It also noted that a delay in the expansion plans and any adverse development on the macro-economic front would pose a downside risk to its valuation.
A material decline from the current price levels can be exploited to invest in the company's stock from a long-term perspective, the brokerage firm said.
It expects the group to post net profit of SAR 1.02 billion and SAR 1.08 billion for 2020 and 2021, respectively.
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