Mubasher: MubasherTrade Research (MTR) issued a report on Jarir Marketing Company, maintaining its “Buy” recommendation on the stock, yet cutting its price target by 20% to SAR193.4.
Jarir's audited financial results for 2015 showed an 11.1% YoY growth in net earnings of SAR828.5 million, in line with both MTRe (-1.1%) and consensus (-2.3%). Earnings growth was fueled by 11.9% YoY higher top-line of SAR6.4 billion, thanks to the two-month salary bonus in Q1 2015, leading to higher spending on consumer items, especially electronics, smartphones, and computer accessories, according to the report issuer.
Jarir has announced the opening of a new showroom in Jeddah, increasing the total number of showrooms opened by four (as expected) to 40 by end of 2015 (34 in Saudi Arabia and 6 in GCC countries). Early 2015, the company had revealed its plan to open seven new showrooms in 2015.
MTR also said that, although it now expects a 23% YoY drop in Q1 2016 revenues, Jarir’s total sales are expected to resume growth in the second half of 2016.
