Itqan Capital starts Mouwasat coverage with ‘Overweight’
Itqan Capital has initiated coverage of Mouwasat Medical Services Company (Mouwasat) with an “overweight” rating, setting the stock’s target price at SAR 102.40 per share, the investment firm said in a recent report.
Mouwasat is operating according to a clear and strong expansion strategy in the Kingdom’s healthcare sector, which helped sustain revenue growth despite the rise in cost, the report said, pointing that the firm incurred higher costs due to kick starting new projects.
Net profit is expected to be impacted by investments, namely Al-Madinah Hospital, Dammam Hospital and a hospital in Yanbu Industrial City, yet a projected relative improvement in Al-Khobar Hospital’s performance will likely offset that impact.
Key growth drivers include enhanced healthcare sector in the Kingdom, as well as the company’s expansion strategy and strong financials, Itqan Capital said.
Meanwhile, the main risks include the increase in the prices of advanced medical equipment and technology, and the cost of ensuring a qualified medical staff, it added.
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