‎AlJazira Cap says Dallah Health’s profit beats estimates, sets rating to ‘Overweight’

‎AlJazira Cap says Dallah Health’s profit beats estimates, sets rating to ‘Overweight’

Dallah Healthcare Co.’s Q3 2021 netprofitof SAR 84.7 million beat AlJazira Capital and consensus estimates’ of SAR 58.1 million and SAR 50.6 million, respectively.

The higher earnings were driven by a one-time gain from the acquisition of a subsidiary for SAR 34.9 million, AlJazira Capital said, adding the healthcare provider managed to sustain its margins despite acquisitions.

The brokerage remained positive on the long-term prospects of Dallah owing to recent acquisitions and expansion to capitalize on the demand for the healthcare sector.

However, Dallah’s net profit is likely to be under pressure in 2022 due to capacity expansion at several hospitals during the next 18 months. That said, the impact of the expansion will be beneficial in the long run.

AlJazira Capital expected the Saudi-listed company to achieve a net income of SAR 214.2 million in 2021 and SAR 211.3 million in 2022.

The brokerage recommended an “Overweight” rating on the stock, setting the target price at SAR 79 per share.