Saudi Car Rentals Bumpy road ahead; D/g Budget to N and Lumi to UW... Budget preferred pick over the medium term

Research evidence excerpt

Saudi Car Rentals Bumpy road ahead; D/g Budget to N and Lumi to UW... Budget preferred pick over the medium term

J P M O R G A N CEEMEA Equity Research

10 June 2026

Saudi Car Rentals

Bumpy road ahead; D/g Budget to N and Lumi to UW...

Budget preferred pick over the medium term

We adopt a more cautious stance on the Saudi car rental space, downgrading Budget MENA Consumer and Real Estate

ACSaudi to Neutral (from OW) with a Dec-27 PT of SAR 40/share (from SAR 67.5), and Taher Safieddine, CFA

Lumi to Underweight (from N) with a Dec-27 PT of SAR 34/share (from SAR 71), (971) 4428-1654

implying potential upside/downside of +15%/-5% from the last close. The sector is taher.safieddine@jpmorgan.com

navigating a confluence of near-term headwinds - regional conflict impact on ST J.P. Morgan Securities plc

rental demand and utilization, visible weakness in the used car sales market, and Vardhman Chhajed

broad-based cost inflation - which we believe is yet to be fully reflected in Street (91 22) 6157 5017

vardhman.v.chhajed@jpmchase.com

estimates (JPMe 8%/24% below cons EBITDA/EPS over FY 26-28E across the J.P. Morgan India Private Limited

names). Against this backdrop, we adopt a more conservative view on the medium-

term P&L profile, factoring in lower utilization, softer yields and a structurally lower

margin base. While we continue to view Budget as our preferred pick within the space

over the medium term - backed by its unmatched market leadership and dominance

in LT leasing through Rahaal - we see significant near-term stress on the P&L (FY 26E

EPS -32% YoY) that will likely keep the shares range-bound until visibility improves.

On Lumi, we move to an UW given a softer growth profile, structurally lower margin

trajectory and an elevated leverage position.