FAB Securities updated its rating on Sabic Agri-Nutrients (SASE:2020) after the company published its second-quarter results.
"We revise our rating on SABIC AGRI NUTRIENTS from HOLD to ACCUMULATE with an unchanged target price of SAR 138.00. Net profit declined significantly by 64.2% YOY in 2Q26 as regional supply chain disruptions weighed on sales volumes despite higher average selling prices. The decline in earnings was further impacted by lower contributions from associates and a joint venture, resulting in a sharp contraction in margins during the quarter," analysts said in a first look note published Wednesday.
For the three-month period, the petrochemical company posted a net profit of 379 million Saudi riyals, down from 1.06 billion riyals a year ago and below FAB's estimate of 1.01 billion riyals. Revenue also fell 26.7% annually to 2.41 billion riyals, against the research firm's forecast of 2.73 billion riyals.
"SABIC AGRI-NUTRIENTS is well positioned to benefit from its strong balance sheet, healthy cash generation and disciplined capital allocation. In addition, the planned capacity expansion through the seventh production complex and continued investment in strategic partnerships are expected to support long-term volume growth. Therefore, we maintain a positive long-term outlook on the Company despite the near-term operating headwinds," analysts added.