Update shared on 06 Dec 2025
Fair value Decreased 1.10%Analysts have slightly lowered their price target on Saudi Basic Industries, revising their estimate of fair value to approximately $63.67. This adjustment reflects more conservative assumptions on revenue growth and profit margins, even though higher future valuation multiples are now expected.
What's in the News
- Twareat Medical Company has filed a legal claim against Saudi Basic Industries, seeking SAR 34.5 million (inclusive of VAT) for alleged financial differences tied to unmet minimum test request volumes under a 2019 to 2024 medical services contract, with potential positive financial impact for Twareat if the claim succeeds (Key Developments).
- The disputed contract covers comprehensive operation of eight medical clinics at Saudi Basic Industries and its affiliates, including staffing, equipment, medications, diagnostics, and laboratory tests. Compensation is owed if annual medical examinations fall below agreed minimum levels (Key Developments).
- An external counsel notice dated November 26, 2025, indicated that a judicial panel ruled commercial courts lack subject-matter jurisdiction over the claim filed against Saudi Basic Industries. This ruling followed closure of pleadings and deliberation and adds procedural uncertainty to the case outcome (Key Developments).
Valuation Changes
- Fair Value: Revised slightly lower from SAR 64.38 to SAR 63.67 per share, indicating a modest reduction in estimated intrinsic value.
- Discount Rate: Edged up marginally from 20.00 percent to 20.02 percent, implying a slightly higher required return and risk assessment.
- Revenue Growth: Forecast reduced significantly from about 2.92 percent to 1.58 percent, reflecting more conservative top line expectations.
- Net Profit Margin: Assumptions cut meaningfully from around 11.10 percent to 7.38 percent, signaling lower anticipated profitability.
- Future P/E: Target valuation multiple increased substantially from 19.45x to 30.65x, indicating expectations of higher relative market pricing despite weaker fundamentals.
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