Maceen Capital has ‘buy’ rating on Saudi Ground Services, Airlines Catering

Maceen Capital has placed a “buy” rating on Saudi Ground Services Co. (SGS), and cut its target price to SAR 90.35 from SAR 104 a share. The brokerage expects SGS to post a net profit growth of five percent for FY-15 to SAR 642 million.

Maceen also recommended a “buy” on Saudi Airlines Catering Co. (SAAC) and reduced the target price to SAR 191.30 from SAR 201 a share. SAAC is seen making a 4.6 percent profit rise in 2015.

The cut in target prices was prompted by the higher risk premium due to the geopolitical conditions as well as the potential risks of making lower profit margins, as agreements with Saudi Airlines may be renewed at lower prices, the brokerage noted.