Itqan Cap expects Al Othaim revenue to flatten out in 2021, raises target price to SAR 133

Abdullah Al Othaim Markets Co.’s revenues dropped significantly in Q1 2021, compared to the same period last year, as people no longer stock-pile as they did at the beginning of the COVID-19 pandemic, Itqan Capital said in a report.

The value-added tax (VAT) impact is evident in consumer demand and the shift in e-learning that negatively impacted the company’s school season.

The brokerage expects that revenues will continue to flatten out as the post-VAT demand normalizes in 2021. However, the company’s strong market standing, solid expansion strategy and market consolidation are bound to offer significant support throughout the year.

Itqan Capital maintained its “Neutral” recommendation on the company, raising the target price per share to SAR 133 from SAR 130.