Al-Rajhi Cap affirms ‘overweight’ on Advanced; ‘underweight’ on SABIC, Sipchem

Al-Rajhi Capital maintained its “Neutral” rating on Yanbu National Petrochemical Co. (Yansab) and Saudi Arabian Fertilizer Co. (SAFCO).

It also affirmed its “overweight” rating on Advanced Petrochemical Co., and “underweight” recommendation on Saudi Basic Industries Corp. (SABIC) and Sahara International Petrochemical Co. (Sipchem), Al-Rajhi Capital said in a recent report.

Though price hikes are expected to be at a lower pace, prices will not see a steep decline compared to the current levels.

Average polymer prices remained higher between 6-25% on a quarterly basis in Q4 2020. Meanwhile, the current spot prices of most products are higher when compared to the 2019 levels and close to the 2018 levels, the report issuer added.

Following an increase in the polymer prices in the current quarter, Al-Rajhi raised the target prices of SABIC, Advanced, Yansab and Sipchem, while keeping the price target of SAFCO unchanged.

Advanced has the biggest upside potential, in light of the valuation methodology, the report issuer added.