NCB Capital keeps ‘overweight’ rating on Savola, cuts TP to SAR 86.50

NCB Capital has maintained an “overweight” rating on Savola Group and reduced the stock’s target price from SAR 89.10 to SAR 86.50, the brokerage firm said in a report.

Savola remained a top pick due to its attractive valuations and ability to cope with lower oil prices. The report also described the Saudi-based industrial group as a “preferable” option to Almarai, as it’s expected to record strong growth ahead.

The investment arm of the National Commercial Bank (NCB) also kept a “neutral” recommendation on Almarai and raised its target price to SAR 83.30 from 81.20.

A positive outlook for Saudi Arabia’s food industries sector and declining oil prices were highlighted as key factors which may boost profit margins at both companies.