Almarai (ALMARAI AB): Buy: Set for better earnings growth in 2H 2026

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Almarai (ALMARAI AB): Buy: Set for better earnings growth in 2H 2026

Q has also been encouraging. 52-WEEK PRICE (SAR)

Cash conversion increases to be another catalyst for rerating. We are not 60.00

worried by its tactical increase in inventory in 2Q26 to support food security amid 48.50

supply chain disruption, as the bigger cash lever is capex, which is now easing. 37.00

Almarai guided its 2026 capex at SAR4bn (around SAR400m lower y-o-y), implying 07/25 01/26 07/26

Target price: 57.00 High: 51.15 Low: 39.86 Current: 46.60

the peak investment cycle is behind. On our forecasts, this supports positive free

cash flow by end-2026 and a recovery in EBITDA cash conversion towards 40% by Source: LSEG IBES, HSBC estimates

2028e as capex and working capital normalise.

Raj Sinha*

Our earnings revisions imply a timing shift. We raise 2026e sales by 0.4% but cut Co-Head of Global Equity Research HSBC Bank Middle East Limited, Dubai branch

2027e-28e sales by 2.4-3.5% (implying 10.2% y-o-y growth in 2026-27e and 7% in raj.sinha@hsbc.com

+971 4 423 6932

2028e), while reducing 2026e net profit by 3.8% and increasing 2027e by 2.5%. We

expect 2H26e to deliver 11.7% sales growth y-o-y and just under 16% net profit Saikat Majumder* Analyst, Emerging EMEA Healthcare & Saudi

growth, in line with management’s directional guidance. Consumer

HSBC Securities and Capital Markets (India) Private Limited

What to watch next is the evidence that dairy revenue per litre starts outpacing cost saikat1majumder@hsbc.co.in

+91 80 6737 2751

per litre in 2H26, and that logistics and energy cost pressures continue to stabilise

Jaina Heerabhai*

rather than to re-accelerate. Analyst, EMEA Healthcare

HSBC Bank Middle East Limited, DIFC

Reiterate Buy rating with an unchanged target price of SAR57.