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AlJazira Capital Keeps Arabian Drilling Co at Neutral After Q1 Results

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AlJazira Capital on Sunday affirmed its neutral rating for Arabian Drilling Co (SASE:2381) following "better-than-expected" first-quarter results.

Thanks to a lower-than-expected OPEX, the oilfield services company reported a profit of 7 million Saudi riyals for the three months ended March 31, against the research firm's estimate of a 4 million-riyal loss. Revenue was down 0.3% quarter over quarter to 822 million riyals, in line with AlJazira Capital's 823 million-riyal estimate.

"ADC delivered better than expected results in Q1-26 supported by lower OPEX. However, next quarter is likely to be challenging for the company with offshore rig suspensions announced in late March. The company guided up to 12% Q/Q decline in topline. Additionally, offshore suspensions will weigh heavily on margins as well. Meanwhile, reactivated land rigs and start of first international contract would briefly support the performance. The stock currently trades at EV/EBITDA of 8.4x based on our FY26E estimates," analysts said.

The stock has a price target of 94.9 riyals.

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