Falcom remains ‘Neutral’ on SABIC, TP set at SAR 100

Falcom Financial Services has maintained a “Neutral” stance on Saudi Basic Industries Corp (SABIC), with a fair value of SAR 100.0 per share in view of the company’s performance in Q3 2019.

SABIC’s net profit sharply declined by 86.3% YoY and 60.6% Quarter-on-Quarter (QoQ) to SAR 834.1 million, primarily due to an impairment provision of SAR 1.51 billion for its investment in Clariant AG.

“The company faces challenges from slowing global growth and lower average selling prices from its primary products as additional new capacities in key product lines (PE, MEG, PC) came online together during the quarter,” Falcom added.

The petrochemicals giant aims to optimize operations and unlock value in key focus areas. Also, the discretionary growth projects remain a priority and the joint venture with Exxon Mobil in the U.S. Gulf Coast is testimony to that, the financial services company noted