Riyadh – Mubasher: Al Rajhi Capital Research has maintained Jarir Marketing’s target price (TP) at SAR 171 per share, with a ‘’Neutral’’ recommendation.

Jarir Marketing’s margins are predicted to tighten in the future, consequent with the company’s penetration into the electronics and smartphones segment, which has lower margins when compared to other product categories, Al Rajhi Capital said in a press release on Sunday.

The firm’s market share will be enhanced in the future through e-commerce growth, along with higher consumer spending and the structural shift to organised retail.

During the third quarter of 2019, Jarir Marketing’s net income rose by 5.9% year-on-year (YoY) to SAR 305 million, lower than expectations of SAR 311 million and SAR 306 million, respectively.   

The decline in earnings was attributed to lower gross margins and higher operating expenses.

Top-line continued to increase by 17% YoY to SAR 2.251 billion, higher than the expected SAR 2.166 billion.

The growth in sales was backed up by some factors such as, higher electronic goods sales, the growing e-commerce channels, and seasonality effect, which boosted stationery sales as schools started.