Saudi Aramco to continue generating robust cash flows: Al Rajhi Capital | ZAWYA MENA Edition
Riyadh-based investment bank Al Rajhi Capital has revised upward the target price on the stock of state oil producer Saudi Aramco from 35 riyals ($9.33) per share to 37 riyals per share.
The target price has been increased following the third-quarter performance of the oil giant, whose stock closed at 37.60 riyals on Sunday.
The premium is based on a 3.75 percent dividend yield on the 2021 dividend per share of 1.4 riyals per share, the brokerage said in a note.
The oil producer’s Q3 net income has more than doubled to $30.4 billion from the year earlier period, beating most analysts’ estimates.
The profit beat was "mainly driven by strong refining and chemical margins, coupled with lower-than-expected operating costs," said Al Rajhi Capital.
The brokerage said Aramco is expected to continue generating robust cash flows, driven by firm oil prices, gradual rise in production, healthy downstream margins and improved “cost efficiencies/synergies”.
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