Al-Rajhi Capital has stated in a report that SABIC’s Q3 net income of SAR 6.18 billion (down 4.5% y-o-y) narrowly missed its (SAR 6.5 billion) as well as consensus forecast of SAR 6.61 billion.
Operating profit for the quarter came in at SAR10.4 billion, in line with its forecast of SAR 10.8 billion.
The report issuer had anticipated lower product prices, especially later in the quarter, and a sluggish industrial environment in China and Europe to restrain SABIC’s earnings growth in Q3.
Investors reacted negatively, with the stock losing 0.6% yesterday in a broadly positive market.
Al-Rajhi continues with its positive stance on SABIC on the back of its strong balance sheet, diversified product base and widespread geographic presence.
The research firm keeps SABIC’s target price unchanged at SAR143.6 a share, reiterating its ‘Overweight’ rating on the stock.