PHOTO
Citi has upgraded Saudi petrochemicals company SABIC to 'Buy' and raised its target price by 14% to 114 riyals ($30.4).
In a note, Citi Research said SABIC offers three attractions: (1) potential to differentiate around underlying growth, with Aramco synergies and oil-to-chemicals expansion the key drivers (2) valuation is attractive vs key regional peers; and (3) a resilient financial framework protects equity in the current weak margin environment, which has another 12 months to run.
"As we have re-assessed the potential, we have made substantial upward revisions to our forecasts (+15% on EPS ’22-30) and raised out DCF-based price target by 14% to 114 SAR." SABIC stock closed trading on Sunday at SAR95 on Saudi Tadawul.
SABIC along with UAE utility Empower, which Citi has at a 'Buy' rating, offer the best combination of value, balance sheet and sustainable growth. It remains 'Neutral' on Borouge, DEWA and ACWA Power.
Empower is currently trading at 1.59 dirhams ($0.43) on Dubai Financial Market.
(Writing by Brinda Darasha; editing by Seban Scaria)
