Abdullah Al Othaim Markets branch
Abdullah Al Othaim Markets Co.’s net profit of SAR 165.5 million for the fourth quarter of 2020 came above AlJazira Capital and consensus estimates of SAR 140.4 million and SAR 118.5 million, respectively.
The increase in value added tax (VAT) and the loss of "back-to-school” sales hit the company's sales in Q4 2020 compared to the same period last year, the brokerage firm said in a recent report.
"We expect these factors to continue to impact the company’s performance in the near term. However, its long-term prospects remain positive," AlJazira Capital said.
It expects Al Othaim's net profit to decline slightly to SAR 433.6 million in 2021.
The report further added that the Tadawul-listed firm stands to benefit from increased demand in the retail sector, which will boost its growth in the long-term.
AlJazira Capital raised its recommendation from "Underweight" to "Neutral", with a target price (TP) of SAR 119 per share.
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