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2223: Extended Land Lease May Support Long-Term Upside Potential

Yanbu Expansion And Vision 2030 Will Unlock Performance Opportunities

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2223
AnalystConsensusTarget
Not Invested
Published 29 Jun 2025

Update shared on 09 Dec 2025

Fair value Increased 3.50%
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AnalystConsensusTarget's Fair Value
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1Y
-11.8%
7D
-0.7%

Analysts have modestly raised their price target for Saudi Aramco Base Oil Company - Luberef to SAR 122.03 from SAR 117.90. They cite improved revenue growth assumptions and a slightly higher future price to earnings multiple, despite some compression in expected profit margins.

What's in the News

  • A scheduled 45 day maintenance turnaround at the Yanbu Facility will start on 15 November 2025, temporarily suspending operations. The Jeddah Facility will remain fully operational. The financial impact is expected to appear in Q4 2025 results (company announcement).
  • The Yanbu Facility Land Lease Investment Agreement with the Royal Commission for Jubail and Yanbu has been extended for 20 Hijri years from 01/01/2025, supporting long term operational continuity and expansion plans valued at SAR 116.1 million over the term (company announcement).
  • A 20 year Ultra Low Sulfur Diesel supply agreement has been signed to sell up to 6,500 barrels per day of ULSD from the Yanbu Refinery to Saudi Aramco, with pricing linked to market benchmarks and aimed at enhancing by product margins (company announcement).

Valuation Changes

  • Fair Value: Raised slightly from SAR 117.90 to around SAR 122.03 per share, reflecting a modestly more positive outlook.
  • Discount Rate: Changed marginally from 19.63 percent to about 19.63 percent, indicating an essentially unchanged risk and return assumption.
  • Revenue Growth: Upgraded significantly from an assumed contraction of approximately minus 5.94 percent to a near flat level of about minus 0.22 percent, implying a much less negative top line trajectory.
  • Net Profit Margin: Reduced from roughly 17.56 percent to about 15.27 percent, signaling expectations of some margin compression despite improved revenue assumptions.
  • Future P/E: Increased slightly from about 24.4 times to roughly 25.3 times, pointing to a modestly higher valuation multiple applied to future earnings.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.