Riyadh – Mubasher: Al Rajhi Capital set the target price (TP) of United Electronics Company (eXtra) at SAR 36, with a "Neutral" recommendation.

The research firm noted that eXtra’s results in the first quarter of the year came in-line with its estimates, supported by regulatory tailwinds.

Moreover, Al Rajhi Capital added that the company’s revenues worth SAR 808 million in Q1-17 were marginally higher than its estimates of SAR 795 million.

“Despite slowing consumer spending, eXtra’s Q1 revenue indicates 2% year-on-year like-for-like (LFL) growth, which we believe is a trend that will continue over the medium term,” the report said.

Al Rajhi Capital pinpointed that the inability of the company to manage margin is a key risk, in the backdrop of another round of energy and utility price hikes and expat levy and VAT implementation.