Care’s Q3 2020 earnings miss estimates, TP at SAR 60: Al Rajhi Cap

National Medical Care Co. (Care) posted a net profit of SAR 16 million in the third quarter of 2020, falling below the expected earnings of SAR 28 million, Al Rajhi Capital said in a recent report.

This was despite Care reporting a 22.9% year-on-year (YoY) growth in revenues to SAR 213 million in Q3 2020, supported by a growth in the number of patients and higher occupancy, the report said.

Care’s profitability was impacted by provisions on receivables, in addition to lower investment income.

The company’s net profit is expected to rise by 34% to SAR 107 million in financial year 2020, and to SAR 127 million in 2021, the report said.

Al Rajhi Capital revised Care’s target price (TP) to SAR 60 per share from SAR 54.9, and reduced its rating to “Neutral”.

The “Neutral” recommendation, according to Al Rajhi Capital, means that the target price is expected to stabilize and that its price may range plus or minus 10% from current price levels during the next 12 months.