- Sabic is facing pressure on its supply chain, which could affect petrochemical margins.
- The company has a strong balance sheet, supported by its solid financial position and government backing.
- Profit estimates for Sabic are set at 4.79 billion riyals, with revenue projected to be 141.07 billion riyals.
- Operating profit is forecasted at 7.63 billion riyals, while the estimated EPS (Earnings per Share) is 1.59 riyals.
- EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) is expected to reach 21.45 billion riyals.
- Free cash flow is projected at 10.29 billion riyals.
- Citi analysts predict a medium-term earnings drop of 2% from earlier estimates due to lower petrochemical margins.
- The lower margins are attributed to anticipated supply increases, especially from China, which could hinder recovery.
- The 4Q EPS is expected to fall to 0.38 riyals, owing to lower petrochemical earnings offsetting improved urea pricing.
- Analysts express concerns about the lack of earnings catalysts, limiting short-term upside potential for the equity.
- There is cautious optimism about more favorable market dynamics in 2025, potentially benefiting Sabic.
- Sabic’s premium P/E (Price-to-Earnings) valuation compared to peers is likely driven by its strong financial position.
A look at Saudi Basic Industries Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 5 | |
| Dividend | 5 | |
| Growth | 2 | |
| Resilience | 4 | |
| Momentum | 2 | |
| OVERALL SMART SCORE | 3.6 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Analysts predict a promising long-term outlook for Saudi Basic Industries Corporation (SABIC) based on its Smartkarma Smart Scores. With high scores in Value and Dividend at 5 each, SABIC is regarded as a solid choice for investors seeking both growth potential and income generation. The company’s robust financial position and attractive dividend yield make it an appealing investment option.
Although SABIC scores lower in Growth and Momentum, with scores of 2 for both factors, its resilience score of 4 indicates the company’s ability to weather market fluctuations and economic uncertainties. Overall, SABIC’s strong performance in key areas like Value and Dividend, coupled with its diversified product portfolio that includes chemicals and steel, positions it favorably for sustained long-term growth and stability.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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