Riyadh - Mubasher: Al Rajhi Capital Research said it lowered its target price (TP) for Savola to SAR 43 per share from SAR 48 per share, while it still maintains its Overweight rating.
The research house said it revised its evaluation for Savola based on the trends in last 2 quarters where it factors in lower gross margin profile for the next couple of years and build for higher currency losses for 2016 (mainly due to depreciation of Egyptian Pound).
However, Al Rajhi Capital expects Savola's earnings to bottom in 2016 as majority impact from
restructuring in retail segment, USCE subsidiary (classified as discontinued operations) and currency depreciation would be behind.
The research units also expects Savola's earnings to stage a recovery from 2017.
