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JPM | FTM | Today’s Research | CEEMEA

CEEMEA Equity Research

CEEMEA First to Market 10 June 2026

Today’s Morning Meeting | Also Published Today | Key Changes | JPM Events | Upcoming Earnings

Today’s Morning Meeting

| Saudi Car Rentals (Taher Safieddine, CFA)

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 Saudi to Neutral (from OW) with a Dec-

27 PT of SAR 40/share (from SAR 67.5), and Lumi to Underweight (from N) with a Dec-27 PT of SAR 34/share (from SAR 71),

implying potential upside/downside of +15%/-5% from the last close. The sector is navigating a confluence of near-term

headwinds - regional conflict impact on ST rental demand and utilization, visible weakness in the used car sales market, and

broad-based cost inflation - which we believe is yet to be fully reflected in Street estimates (JPMe 8%/24% below cons EBITDA/

EPS over FY 26-28E across the 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. The stocks are trading at 22-30% discounts to the wider Saudi consumer/

retail peers, which we view as justified given the sectoral headwinds and muted FY 25-28E CAGRs.