Riyadh - Mubasher: Al Rajhi Capital maintained their estimates and price target (PT) for Jarir Marketing at SAR 110.8 per share, with a Neutral rating, according to a recent report.
“Jarir’s revenue growth at 17.7% year-on-year in the fourth quarter of 2016 was much ahead of our flattish estimate, driven by higher sales of electronics, mainly smartphones according to the company’s announcement,” the report indicated.
“iPhone 7 sales in the Kingdom commenced in Q4 and is likely to have played a major role in driving smartphone sales,” it added.
According to Al-Rajhi Capital, the strong revenue increase implies growth of old stores at 8-9%, the best performance over the last 7 quarters, while high revenue growth and lower gross margin at 13.6%, which is lower than estimates, implies skewed sales growth towards electronics and likely higher discounts than usual.
“Despite the beat on revenue, gross profit was mostly in-line with our estimates,” the research firm stated in its report.
