Riyadh – Mubasher: The research department of Al Rajhi Capital has upgraded Abdullah Al Othaim Markets Company’s target price (TP) to SAR 88 per share instead of SAR 76, implying 14.8% upside, the kingdom-based firm said in a statement on Monday.

Al Othaim Markets posted a 1.58% year-on-year increase in its profits for the first quarter of 2019, recording  SAR 68.33 million.

Revenues of the Saudi-based firm grew 8.97% to SAR 1.95 billion in Q1-19, while Al Rajhi’s estimation was SAR 1.92 billion.

“Al Othaim’s attractive FY19E anticipated dividend yield of ~5.2% should appeal to income-seeking investors,” the statement highlighted.

Al Rajhi attributed the increase in revenues to the sale contribution from new stores that reached 222 stores in Saudi Arabia and 38 stores in Egypt, in addition to marginal improvement in like for like (LFL) growth.

Gross profit increased 12% year-on-year to SAR 383 million, while gross margin expanded to 19.54% mainly due to the company’s strong bargaining power which led to favourable pricing from suppliers.