NBK Capital trims SABIC's fair value to SAR 93.40; cuts to ‘hold’

NBK Capital has downgraded Saudi Basic Industries Corporation (SABIC) to “hold” rating from “buy”, and cut its fair value to SAR 93.40 from SAR 95.30.

SABIC lacks catalysts to outperform its major regional peers in the short term, the investment arm of the National Bank of Kuwait (NBK) said.

The world's biggest petrochemicals group is seen making SAR 20.1 billion earnings in 2015, 14.2 percent down year-on-year, and is expected to post SAR 20.5 billion profit in 2016, said NBK Capital.

SABIC reported net income of SAR 15.7 billion for the first nine months of 2015, down 18 percent YOY, beating the market consensus by more than 28 percent.

NBK Capital also raised its dividend expectations to SAR 5.5 from SAR 5 for both 2016 and 2017, implying an average payout of around 79 percent for these two years.