BofA Global Research revised its price objective and earnings forecasts for Sabic Agri-Nutrients (SASE:2020), noting expectations of a slower increase in exports in the second quarter.
"SABIC Agri-Nutrients on its analyst call stated that after launching its first bulk urea shipment from Yanbu port on the West Coast (mid-May), it has been able to export 40% of urea production from the West Coast and aims to reach 70% (no timeline disclosed). On the back of a slower-than-expected increase in export volumes in 2Q (we forecast 18% lower volumes than our previous forecast), we lower our FY26E sales volumes as a percentage of capacity to 70% from 75%. We hence lower our FY26E EPS by 6% [to SAR 10.51] and our [price objective] to SAR 173 from SAR 175," according to a Tuesday note.
As such, the research firm now expects second-quarter sales volumes of 0.96 million tonnes and net income of 938 million Saudi riyals. Conversely, analysts lifted their EPS estimates for full-year 2027 and 2028 to 9.96 riyals and 9.45 riyals, respectively, from 9.91 riyals and 9.40 riyals.
BofA also reiterated its buy rating, highlighting management commentary that its urea plants are "operating at full capacity." The comments suggest the company can sell volumes "quickly" when the Strait of Hormuz opens, the research firm added.