Riyad Capital on Sunday updated its rating for Ades Holding (SASE:2382), noting the oil and gas drilling company's "strong" 2025 report and ongoing geographical diversification.
Ades Holding logged a 27% year-on-year increase in its fourth-quarter 2025 sales to 1.99 billion Saudi riyals, in line with the research firm's forecast of 1.93 billion Saudi riyals. The company also recorded net profit of 221 million riyals, up 7% year over year and aligned with Riyad Capital's 210 million-riyal estimate.
Analysts noted management comments on steady utilization rates, which remained at 98%, as the company continues to expand its geographical footprint. This diversification strategy is seen by the research firm as "significantly important" amid the current landscape.
"We remind investors that the acquisition of Shelf expanded ADES' rig count by 33, as well as the geographic exposure to West Africa, Norway, Denmark, the UK, and India (among others). These factors will produce noise in the financials for 1Q26. With growth in geographical exposure, which we note has deepened in Southeast Asia, West Africa, and Brazil, we highlight that in the uncertain energy market this adds to ADES' defensiveness. Despite lower [free cash flow to the firm] multiples (TTM) and a higher dividend, we downgrade the rating as the stock price has appreciated. We may revisit the rating with more visibility," the note said.
As such, the stock's rating was changed to neutral, with a price target of 21 riyals. In a Nov. 10, 2025 note, Riyad Capital had a buy rating for the company.