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JPMorgan rates Saudi Aramco ‘overweight’ and issues 37 riyals price target

The US-based investment bank is the first major brokerage to begin covering Saudi Aramco with an ‘overweight’ rating.

JPMorgan initiated its coverage of Saudi Aramco with an ‘overweight’ rating – the first major brokerage to do so – and issued a 37 riyals price target for the stock.

Saudi Aramco is trading at 34.60 riyals as of 11:45 GMT on Wednesday. Based on the stock’s current price, analysts at JPMorgan believes it has a potential upside of 6.9%.

‘Our bullish view is predicated on its dividend growth outlook, with scope to increase the $75 billion baseline as production scales up,’ JPMorgan said in a note.

Analysts at JPMorgan said that production capacity could increase to 15 million barrels of oil a day (bopd) from its current capacity of 12 million bopd and production of 10 million bopd, with the Kingdom of Saudi Arabia keen to claw back its share of global oil demand as the market tightens.

Goldman Sachs bullish on Saudi Aramco share price

Analysts at Goldman Sachs offered an even more bullish view than their counterparts at JPMorgan, with the bank issuing Saudi Aramco with a ‘neutral’ rating and a price target of 41 riyals, implying a potential upside of 18.5%.

Meanwhile, analysts from HSBC started coverage of the energy giant with a ‘hold’ rating and a target price of 36.80 riyals, implying a potential upside of 6.35%.

Analysts from Bernstein and Jefferies began coverage of Saudi Aramco in December with the pair giving the stock an ‘underperform’ rating, contending that the stock had been priced at a premium to international oil majors in its IPO despite the company having governance issues.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.

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