Riyadh - Mubasher: NCB Capital placed a Neutral rating on the stock of Al Marai with a price target (PT) of SAR 52.7 per share, which is lowest than the stock’s current price at SAR 69, according to a recent report.

As per the report, Al Marai saw disappointing results due to weak top-line growth, as the company reported a net income coming broadly flat year-on-year at SAR 489 million, which is lower than the research firm estimates of SAR 540 million.

“The variance is due to weak sales growth, with juice and dairy segment sales declining by 2.7%, and higher financing and FX charges.”

“However, strong margin expansion from lower operating expenses and improving poultry sales are key positives,” the report indicated.

“Al Marai has managed to import 52% of its alfalfa requirements in 2016 from foreign countries and is a key positive. However, imposing levies on expats will lead to higher costs for Almarai, at 7-9% of 2018 and 2019 net income,” it added.