Saudi Fransi Capital reaffirms ‘buy’ on SABIC; TP SAR 112

Saudi Fransi Capital maintained a “buy” rating on Saudi Basic Industries Corp. (SABIC), keeping its share target price at SAR 112, as the petrochemical company’s second quarter profit had beaten local estimates.

The firm’s SAR 6.17 billion profit has beaten Saudi Fransi’s own and other analysts’ forecast by 27 percent and 25 percent, respectively, the financial advisory arm of Banque Saudi Fransi said in a research note.

The operating performance of the petrochemical company was better than expected, as the prices of products had improved.

Cheap ethane-based growth in Saudi Arabia is largely behind, and international expansion could help catalyze the stock, the note added.