Riyadh-Mubasher: Saudi Fransi Capital (SFC) upgraded Sadafco to 'Buy' from 'Hold', and maintained 'Buy' on Almarai, Savola, Jarir, Othaim, Farm, Alhokair, Herfy, Catering, Al Tayyar, Mouwasat, Dallah and Care. It also recommended 'Hold' on Nadec and eXtra.
The research firm expected Saudi consumer companies to post combined net profits of SAR 2.2 billion, implying reasonably strong earnings growth of 11% year-on-year.
At the sector level, SFC expected healthcare, retail and consumer staples to register a healthy 19%, 12%, 11% y/y rise, respectively. Travel and tourism earnings would also grow at a below par 5% y/y.
At the company level, while 9 out of the 15 companies are likely to report more than 10% y/y earnings growth, SFC expects eXtra (+238% y/y), Care (+170% y/y), Sadafco (+64% y/y), Nadec (+25% y/y) and Farm (+22% y/y). Meanwhile, Q4 earnings of Catering are forecasted to increase by 4% y/y and Jarir (+1% y/y). Mouwasat's Q4 earnings would decline by 6% y/y.
