FAB Maintains Rating, Price Target on stc After Q2 Net Profit Beat

06:08 AM EDT, 08/05/2026 (MT Newswires) -- FAB Securities maintained its investment view on Saudi Telecom Co. (SASE:7010), d/b/a stc, following the company's results for the second quarter. "We maintain our BUY rating on STC with a target price of SAR 50.0 per share. STC reported a 5.2% YOY decline in net income in 2Q26, primarily driven by higher direct costs, lower other income, and zakat charges compared to zakat reversals recorded in the prior-year period. Despite this, the Company's revenue and EBITDA grew 3.7% YOY and 3.9% YOY to SAR 20.2 Bn and 6.4 Bn, respectively during 2Q26. Operational momentum remained healthy across STC's core markets," analysts wrote in a Tuesday first look note. For the three-month period, the telecommunications company posted a net profit of 3.62 billion Saudi riyals, beating FAB's forecast of 3.34 billion riyals. Revenue, meanwhile, rose 3.7% annually to 20.17 billion riyals, compared with the 20.21 billion-riyal estimate of the research firm. "The Company's financial position remains robust as of 2Q26. STC ended the quarter with a healthy cash balance of SAR 14.0 Bn, while maintaining a conservative Net Debt/EBITDA ratio of 0.4x, consistent with its capital structure strategy following recent sukuk issuances to support strategic investments," analysts added. "The Company expects profitability to improve further as its Group Efficiency Program continues to deliver cost savings and operational efficiencies across the business."