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United Securities Upgrades Saudi Aramco Rating, Price Target After Strong Q1 Earnings

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United Securities LLC upgraded Saudi Arabian Oil Co. (SASE:2222), d/b/a Saudi Aramco, to buy following the oil giant's first-quarter results.

"Saudi Aramco started the year on a strong note, with both topline and bottom-line performance exceeding our forecasts. Improved downstream margins were the primary driver behind the earnings beat," analysts said Monday.

Thanks to stronger-than-expected oil price realizations, Saudi Aramco logged a 6.8% annual increase in revenue to 433 billion riyals, higher than the research firm's estimates by 8.7%. The company's net income stood at 120 billion riyals, up 25.6% year over year, and above the research firm's forecast.

"Looking ahead, we expect the company's revenue growth to remain constrained by lower volumes amid the ongoing regional conflict and its impact on global oil supply. Management has indicated that supply normalization may only occur in 2027 if current disruptions persist. Aramco has partially mitigated these challenges by ramping up its existing infrastructure, including the East-West pipeline, utilizing new crude export outlets at Rabigh, and reconfiguring infrastructure to supply crude to select West Coast refineries," analysts added.

The stock's price target also increased to 31 riyals.

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