Riyad Capital Affirms Almarai Co at Neutral After Q2 Results

Riyad Capital affirmed its investment view on Almarai Co. (SASE:2280, with a price target of 48 Saudi riyals, as its second-quarter results aligned with the research firm's estimates. "We expect continued expansion in the protein segment to support revenue growth, while higher diesel prices, in addition to the indirect impacts on supply chains, will remain the key challenge. We maintain our Target Price [of SAR48] and Neutral rating, as the company's growth drivers and cost pressures remain in line with our core assumptions. We believe that the key determinant of earnings growth will be the company's ability to contain cost pressures," Riyad Capital said in a Monday first look note. Thanks to higher revenue volumes, the food and beverage company logged an 11% year-over-year increase in revenue to 5.87 billion riyals, broadly in line with Riyad Capital's 5.74 billion-riyal estimate. Net profit declined 2% annually to 636 million riyals, aligning with the research firm's estimate of 648 million riyals.