Riyadh – Mubasher: NCB Capital set the price target (PT) of Qassim Cement at SAR 59.7, with a "neutral" recommendation.

The research firm noted that the cement company’s results for the first quarter of the year came below its estimates of SAR 94.7 million, posting SAR 80 million with a 39.9% decline year-on-year.

NCB Capital expected that the stock would trade at a price-earnings ratio (P/E ratio) of 12.8x vs. peer average of 12.9x.

Qassim Cement’s total sales quantity of 1.07 million tonnes in the first quarter of 2017 was in line with our estimates of 1.08 million tonnes, the report revealed adding that “this weakness reflects the muted sector outlook.”

Average selling prices stood at SAR 178 per tonne and came lower than NCB Capital’s estimates of SAR 191 per tonne.

NCB Capital said that these discounts came as a result of the overall construction slowdown and increased competition in the sector.