FALCOM stays “Neutral” on Savola, lowers TP to SAR 40

22/02/2021 Argaam

FALCOM Financial Services maintained its “Neutral” rating on Savola Group, but lowered the target price (TP) to SAR 40 per share.

 

“Savola faces headwinds in the form of a higher value-added tax (VAT) rate, which could result in a reduction in consumer spending, and may suppress its profitability in the near term,” the brokerage said in a recent note.

 

Moreover, continued weakness in the sales of oil and sugar products due to lower demand remains a challenge for Savola.

 

The company is expected to report an 8% year-on-year (YoY) increase in net profit to SAR 984 million in 2021.

Savola Group - FALCOM Financial Services

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