Aramco’s Q3 earnings likely to decline despite record H1 performance: Al Rajhi Cap

Aramco is expected to see a drop in third-quarter earnings, following record performance in the first half of 2022, Al Rajhi Capital highlighted in a recent report.

“We expect Aramco to witness a slight decline in earnings in Q3. However, the medium to long-term outlook remains positive,” the investment firm noted.

The crude giant recently posted a surge in second-quarter profit to the highest value since its listing of SR182 billion ($48.4 billion), from SR148 billion in the first quarter.

It attributed the above-estimate results to rising crude prices which soared to record highs earlier this year, higher volumes sold, and improved downstream margins.

Commenting on the results, Al Rajhi Cap said: “We see Q2 record performance as an exception and may not be repeated in the near term, given the slowdown in the global economy amid rising inflation, lower demand, and easing geopolitical tensions.”

Average oil prices are already down 9 percent so far in the current quarter and are likely to remain below second-quarter levels. 

“The stock currently offers a dividend yield of 3.3 percent, which will continue to provide support to the share price. We remain neutral on Aramco with a target price of SR42,” the report concluded.