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Saudi Aramco is expected to see a drop in net profit year-on-year (YoY) in Q3 2024 on “weaker upstream realisations, lower refining margins and expected inventory losses”, according to research from Citigroup Global Markets Inc.
Net profit is seen 20% lower YoY at $26.3 billion, Citi Research said, revising lower by 11% their previous estimate.
The bank has trimmed the target price to 29.5 riyals ($7.87) from SAR 30 previously, and retained its ‘Neutral’ rating on the stock.
Our base-case financial forecasts see the Aramco equity trade with a FCF (free cash flow) yield of 3.6% in 2025, below that of the IOC peer average. Investors will need to balance that comparative valuation premium against Aramco’s key attribute of resource depth (60+ years of oil resource is unrivalled in the industry). We think the equity story of Saudi Aramco is perhaps better (comparatively) suited to an environment of low oil prices,” said analyst Alastair R Syme.
Aramco is expected to post results on November 5.
(Writing by Brinda Darasha; editing by Seban Scaria)
