Elm Company (7203.SE): Model update post 2Q26; TP to SAR690, keep Neutral

Research evidence excerpt

Elm Company (7203.SE): Model update post 2Q26; TP to SAR690, keep Neutral

Action |

03 Aug 2026 13:38:18 ET │ 15 pages

Elm Company (7203.SE)

Model update post 2Q26; TP to SAR690, keep Neutral

CITI'S TAKE

Neutral Updating estimates post weaker-than-expected 2Q26 results, which saw

revenue growth decelerating to +12%YoY and organic growth to c.6% on Price (03 Aug 26 15:00) SAR642.00

our estimates. On the call, management highlighted that part of the Target price SAR690.00↓

weaker 2Q26 growth reflected project execution timing, softer BPO from SAR700.00

momentum, some Hajj-related revenues recognized in 1Q26, as well as the Expected share price return 7.5%

impact of the regional conflict on certain Digital products. Thiqah was Expected dividend yield 1.4%

loss-making in 1H26, but turned marginally profitable in 2Q26; however,

Expected total return 8.9% management did not provide any profitability guidance for the business.

Market Cap SAR51,360M Group FY26 guidance was maintained, with 1H26 revenue growth of

+21%YoY and EBIT margin of 22.8% tracking above or within the guided US$13,676M

ranges of 17-19% and 21-23%, respectively. Following the results, we

modestly reduce our estimates to reflect slightly lower growth

assumptions (now see +17.5% sales growth in FY26e) and margins (22% in

Maxim NekrasovAC

2026e). Our TP moves to SAR690 from SAR700; maintain Neutral. +44-20-7500-7264

maxim.nekrasov@citi.com

Valuation and TP change — We reduce our EPS estimates by c.2% in FY26-28E,

reflecting 2Q26 miss and more conservative assumptions on organic growth and

EBIT margin. Our TP moves to SAR690 from SAR700, implying c.20x 2027E P/E. We

now forecast +17.5% topline growth in FY26E versus BBG consensus at 18.9%, while

EBIT margin remains broadly in line with consensus at 22%.