Riyadh-Mubasher: NCB Capital (NCBC) research said it will remain Overweight on the stock of Saudi Telecom Co.(STC) with a price target of SAR 3.5 per share.
NCBC said also that STC will remain its top pick in the telecom sector supported by its defensive nature, strong balance sheet and attractive dividend yield of 7.2%. STC is also well positioned to benefit from the National Transformation Program (NTP 2020).
STC reported a disappointing set of results with a net income of SAR1.87 billion, declining 27.1% y-o-y, which came significantly lower than NCBC and consensus estimates of SAR 2.5 billion and SAR 2.3 billion, respectively.
Although STC reported a strong top-line growth of 11.1% y-o-y, it was offset by higher than expected cost of services and Opex in addition to significant losses from international operations and an increase in other expenses.
