On Wednesday, Saudi National Bank (TADAWUL: 1180) received an upgrade from a Hold to a Buy rating by Jefferies, with the price target being increased to SAR46.00 from the previous SAR45.00. The upgrade comes amid improved market conditions and positive feedback from the bank's recent earnings call.
The analyst from Jefferies highlighted a shift in sentiment due to easing concerns over sovereign debt and the potential for lower interest rates. These factors are contributing to a more optimistic outlook for the bank. Additionally, the recent earnings call by Saudi National Bank was noted as their most favorable in recent years.
The appointment of a new CEO at Saudi National Bank is also seen as a positive change, although the bank's overall outlook remains similar with an expected return on average tangible equity (ROATE) of around 16%. The minor revisions in expectations have led to a slight increase in the price target.
Jefferies' decision to raise the rating to Buy reflects their view that there is now material upside to the stock. The analyst's comments suggest confidence in the bank's direction and performance under the new leadership, despite the outlook not being markedly different.
Investors may take this rating upgrade as a sign of the bank's solid position in the market and potential for growth. The new price target of SAR46.00 represents a modest but notable increase from the previous target, indicating a positive adjustment in the bank's valuation.
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