Saudi Gazette - Kingdom’s strong performance in retail stocks rolls on: NCB Capital:
"In its updated report on the Saudi retail sector, NCB Capital, the GCC’s leading wealth manager and the Kingdom’s largest asset manager, has revealed that the strong performance of Saudi retail stocks continues unabated with the sector up more than 40 percent YTD in 2013.
“We believe rather than expectations of upward revisions in earnings estimates, the strong performance is due to multiple expansion. This is due to the strong outlook of the sector,” said Farouk Miah, CFA, Head of Equity Research at NCB Capital. “For stocks under our coverage, we expect average three year earnings CAGR of 17 percent. We remain Overweight on Extra and Shaker and Neutral on Al Hokair, Al Othaim and Jarir.”
NCB Capital remains Overweight on Extra with a PT of SR135.4 and Shaker with a PT of SR92.7. “We believe the outlook of Extra remains strong with new store openings ahead of schedule, although this comes at the price of short-term margin pressure,” said Miah. “Despite expecting some weakness in 2H13 for Shaker, we believe the longer term demand outlook remains strong with Shaker well positioned to capture this.”"
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