Aljazira Cap: Mouwasat Q3 2020 beats estimates; TP set at SAR 123/share

Aljazira Capital said, in a report issued on Mouwasat Medical Services Co. that Q3 2020 net income beat its estimates and came also ahead of average forecast.
 

The number of outpatient visits rose in Q3 due to coronavirus, as most of the population chose not to travel, which triggered a leap in the company's revenues, as well as transfers from the Ministry of Health, according to the report issuer.
 

Aljazira also sees a limited increase in 2021 revenues, and expects expansions via Dammam and Madina hospitals to be the key driver for growth.
 

It also said it remains upbeat on Mouwasat long-term potential, amid support from improved margins and growth plans.
 

The medical services provider is projected to post net profit of SAR 533.5 million and SAR 548.9 million in 2020 and 2021, respectively, Aljazira Capital said.
 

It maintained its “Neutral” recommendation on the stock, raising its target price to SAR 123, from SAR 110.40.
 

The brokerage firm added that raising the stock's target price followed the positive contribution by Al-Kheir Hospital and improved performance of specialized departments, as operation rates in the hospital returned to pre-pandemic levels.