Riyadh-Mubasher: NBK Capital, the investment arm of National Bank of Kuwait (NBK), reiterated its ‘Hold’ recommendation on Kayan, cutting the stock’s fair value to SAR 8.10 from SAR 9.0 per share.
The stock has declined by 33% year-to-date, underperforming the broader Saudi Petrochemicals Sector Index by more than 13%.
“Looking ahead, we see limited catalysts for the stock to outperform the broader index in the short-to-medium term,” the research firm said.
NBK Capital has cut its 2016F and 2017F earnings by around 12% and 14%, respectively, primarily due to slightly lower expected product price realizations and higher tax assumptions.
“We based our 2016 earnings forecast on an oil price of $60/bbl; every $5/bbl decline below this price will adversely impact our 2016F EPS by roughly 3%,” the research firm said.
