Aljazira Capital cuts Jarir's TP after Q2 profit miss

Aljazira Capital has slashed Jarir Marketing Co.'s target price to SAR 109 and recommended a "neutral" rating on the stock after the retailer's second-quarter net profit missed its estimate by 13 percent.

The profit decline was attributed to lower profit margins and diversified sales mix.

In a report, the brokerage firm adopted a cautious outlook for Jarir based on lower estimates for sales, given expected lower consumer spending and VAT implementation.

The investment arm of Bank Aljazira said is now projecting a 15 percent year-on-year (YoY) drop in Jarir's FY-2016 net profit, while dividend payment is estimated at around SAR 6 a share.

Last week, Jarir reported a net profit of SAR 302.6 million for H1-2016, a 25 YoY percent decrease. Net profit for second quarter fell 17 percent YoY to SAR 128.5 million,