Almarai (SASE:2280) - Share price, News & Analysis

Q: What is the Fair Price of 2280 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

2280 (SAR54) is trading below our estimate of [[fair value]] (SAR76.7)

2280 fundamental analysis
Snowflake Score
Valuation	4/6
Future Growth	3/6
Past Performance	1/6
Financial Health	4/6
Dividends	5/6

2280 Stock Overview

Almarai Company, together with its subsidiaries, operates as an integrated consumer food and beverage company in Saudi Arabia, Egypt, Jordan, and other Gulf Cooperation Council countries.

Rewards

Trading at 29.6% below our estimate of its fair value

Earnings are forecast to grow 12.69% per year

Pays a reliable dividend of 1.85%

Risk Analysis

Has a high level of debt

Almarai Competitors

Savola Group

SASE:2050

ر.س17.9b

Saudia Dairy & Foodstuff

SASE:2270

ر.س5.1b

Halwani Bros

SASE:6001

ر.س2.7b

Arabian Food & Dairy Factories

SASE:9536

ر.س237.2m

Price History & Performance

Summary of all time highs, changes and price drops for Almarai
Historical stock prices
Current Share Price	ر.س54.00
52 Week High	ر.س58.50
52 Week Low	ر.س46.25
Beta	0.34
1 Month Change	7.57%
3 Month Change	3.85%
1 Year Change	-3.57%
3 Year Change	4.05%
5 Year Change	-14.01%
Change since IPO	277.15%

Recent News & Updates

Jun 24

Almarai Company (TADAWUL:2280) Shares Could Be 26% Below Their Intrinsic Value Estimate

Today we'll do a simple run through of a valuation method used to estimate the attractiveness of Almarai Company...

Jun 02

Almarai (TADAWUL:2280) Will Be Hoping To Turn Its Returns On Capital Around

When researching a stock for investment, what can tell us that the company is in decline? Typically, we'll see the...

Shareholder Returns

	2280	SA Food	SA Market
7D	1.1%	1.6%	2.6%
1Y	-3.6%	-14.1%	20.7%

Return vs Industry: 2280 exceeded the SA Food industry which returned -14.1% over the past year.

Return vs Market: 2280 underperformed the SA Market which returned 20.7% over the past year.

Price Volatility

Is 2280's price volatile compared to industry and market?
2280 volatility
2280 Average Weekly Movement	4.5%
Food Industry Average Movement	5.0%
Market Average Movement	5.1%
10% most volatile stocks in SA Market	7.9%
10% least volatile stocks in SA Market	3.3%

Stable Share Price: 2280 is not significantly more volatile than the rest of SA stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: 2280's weekly volatility (4%) has been stable over the past year.

About the Company

Founded	Employees	CEO	Website
1977	34,670	Abdullah Albader	https://www.almarai.com

Almarai Company, together with its subsidiaries, operates as an integrated consumer food and beverage company in Saudi Arabia, Egypt, Jordan, and other Gulf Cooperation Council countries. It operates through Dairy and Juice, Bakery, Poultry, and Other Activities segments. The company offers dairy, fruit juice, and related food products under the Almarai, Joosy Life, Beyti, and Teeba brand names; bakery products under the L’usine and 7 Days brand names; and poultry products under the Alyoum and AlBashayer brand names.

Almarai Fundamentals Summary

How do Almarai's earnings and revenue compare to its market cap?
2280 fundamental statistics
Market Cap	ر.س54.00b
Earnings (TTM)	ر.س1.64b
Revenue (TTM)	ر.س17.31b

33.0x

P/E Ratio

3.1x

P/S Ratio

Is 2280 overvalued?

See Fair Value and valuation analysis

Earnings & Revenue

Key profitability statistics from the latest earnings report
2280 income statement (TTM)
Revenue	ر.س17.31b
Cost of Revenue	ر.س12.26b
Gross Profit	ر.س5.05b
Other Expenses	ر.س3.42b
Earnings	ر.س1.64b

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)	1.64
Gross Margin	29.18%
Net Profit Margin	9.45%
Debt/Equity Ratio	66.5%

How did 2280 perform over the long term?

See historical performance and comparison

Dividends

1.9%

Current Dividend Yield

60%

Payout Ratio

We’ve recently updated our valuation analysis.

Valuation

Is 2280 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

4/6

Valuation Score 4/6

Price-To-Earnings vs Peers
Price-To-Earnings vs Industry
Price-To-Earnings vs Fair Ratio
Below Fair Value
Significantly Below Fair Value
Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2280?

Other financial metrics that can be useful for relative valuation.

The above table shows the n/a ratio for 2280. This is calculated by dividing 2280's market cap by their current preferred multiple.
What is 2280's n/a Ratio?
n/a Ratio	0x
n/a	n/a
Market Cap	ر.س54.00b

2280 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	3.8x
Enterprise Value/EBITDA	15.5x
PEG Ratio	2.6x

Price to Earnings Ratio vs Peers

How does 2280's PE Ratio compare to its peers?

2280 PE Ratio vs Peers

The above table shows the PE ratio for 2280 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	PE	Estimated Growth	Market Cap
Peer Average	37.7x
2050 Savola Group	52.7x	22.5%	ر.س17.9b
2270 Saudia Dairy & Foodstuff	24.7x	11.6%	ر.س5.1b
6001 Halwani Bros	34.1x	17.2%	ر.س2.7b
9536 Arabian Food & Dairy Factories	39.4x	n/a	ر.س237.2m
2280 Almarai	33x	12.7%	ر.س54.0b

Price-To-Earnings vs Peers: 2280 is good value based on its Price-To-Earnings Ratio (33x) compared to the peer average (37.7x).

Price to Earnings Ratio vs Industry

How does 2280's PE Ratio compare vs other companies in the Asian Food Industry?

Price-To-Earnings vs Industry: 2280 is good value based on its Price-To-Earnings Ratio (33x) compared to the SA Food industry average (52.7x)

Price to Earnings Ratio vs Fair Ratio

What is 2280's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2280 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	33x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 2280's Price-To-Earnings Fair Ratio for valuation analysis.

Share Price vs Fair Value

What is the Fair Price of 2280 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2280 (SAR54) is trading below our estimate of fair value (SAR76.7)

Significantly Below Fair Value: 2280 is trading below fair value by more than 20%.

Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Target price is lower than the current share price.

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Future Growth

How is Almarai forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

Future Growth Score

3/6

Future Growth Score 3/6

Earnings vs Savings Rate
Earnings vs Market
High Growth Earnings
Revenue vs Market
High Growth Revenue
Future ROE

12.7%

Forecasted annual earnings growth

Earnings and Revenue Growth Forecasts

Analyst Future Growth Forecasts

Earnings vs Savings Rate: 2280's forecast earnings growth (12.7% per year) is above the savings rate (8.9%).

Earnings vs Market: 2280's earnings (12.7% per year) are forecast to grow faster than the SA market (-0.5% per year).

High Growth Earnings: 2280's earnings are forecast to grow, but not significantly.

Revenue vs Market: 2280's revenue (6.8% per year) is forecast to grow faster than the SA market (-3.5% per year).

High Growth Revenue: 2280's revenue (6.8% per year) is forecast to grow slower than 20% per year.

Earnings per Share Growth Forecasts

Future Return on Equity

Future ROE: 2280's Return on Equity is forecast to be low in 3 years time (12.8%).

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Past Performance

How has Almarai performed over the past 5 years?

Past Performance Score

1/6

Past Performance Score 1/6

Quality Earnings
Growing Profit Margin
Earnings Trend
Accelerating Growth
Earnings vs Industry
High ROE

-5.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2280 has high quality earnings.

Growing Profit Margin: 2280's current net profit margins (9.5%) are lower than last year (11.9%).

Past Earnings Growth Analysis

Earnings Trend: 2280's earnings have declined by 5.4% per year over the past 5 years.

Accelerating Growth: 2280's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: 2280 had negative earnings growth (-10.3%) over the past year, making it difficult to compare to the Food industry average (-19.3%).

Return on Equity

High ROE: 2280's Return on Equity (10.2%) is considered low.

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Financial Health

How is Almarai's financial position?

Financial Health Score

4/6

Financial Health Score 4/6

Short Term Liabilities
Long Term Liabilities
Debt Level
Reducing Debt
Debt Coverage
Interest Coverage

Financial Position Analysis

Short Term Liabilities: 2280's short term assets (SAR8.4B) exceed its short term liabilities (SAR7.2B).

Long Term Liabilities: 2280's short term assets (SAR8.4B) do not cover its long term liabilities (SAR9.4B).

Debt to Equity History and Analysis

Debt Level: 2280's net debt to equity ratio (63.5%) is considered high.

Reducing Debt: 2280's debt to equity ratio has reduced from 89.6% to 66.5% over the past 5 years.

Debt Coverage: 2280's debt is well covered by operating cash flow (36.7%).

Interest Coverage: 2280's interest payments on its debt are well covered by EBIT (6x coverage).

Balance Sheet

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Dividend

What is Almarai current dividend yield, its reliability and sustainability?

Dividend Score

5/6

Dividend Score 5/6

Notable Dividend
High Dividend
Stable Dividend
Growing Dividend
Earnings Coverage
Cash Flow Coverage

1.85%

Current Dividend Yield

Dividend Yield vs Market

Notable Dividend: 2280's dividend (1.85%) is higher than the bottom 25% of dividend payers in the SA market (1.84%).

High Dividend: 2280's dividend (1.85%) is low compared to the top 25% of dividend payers in the SA market (4.3%).

Stability and Growth of Payments

Stable Dividend: 2280's dividends per share have been stable in the past 10 years.

Growing Dividend: 2280's dividend payments have increased over the past 10 years.

Earnings Payout to Shareholders

Earnings Coverage: With its reasonable payout ratio (60%), 2280's dividend payments are covered by earnings.

Cash Payout to Shareholders

Cash Flow Coverage: With its reasonable cash payout ratio (65.6%), 2280's dividend payments are covered by cash flows.

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Management

How experienced are the management team and are they aligned to shareholders interests?

4.6yrs

Average management tenure

CEO

Abdullah Albader

1.42yrs

Tenure

Mr. Abdullah Nasser Bader Albader has been Chief Executive Officer at Almarai Company since March 7, 2021 and was its Executive Vice President of Bakery since 2015 until March 7, 2021. He was General Manag...

Leadership Team

Experienced Management: 2280's management team is considered experienced (4.6 years average tenure).

Board Members

Experienced Board: 2280's board of directors are considered experienced (3 years average tenure).

Ownership

Who are the major shareholders and have insiders been buying or selling?

Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.

Data	Last Updated (UTC time)
Company Analysis	2022/08/12 00:00
End of Day Share Price	2022/08/11 00:00
Earnings	2022/06/30
Annual Earnings	2021/12/31