Riyadh - Mubasher: A report issued by Aljazira Capital Research stated that the results of the Saudi Arabian Oil Company (Saudi Aramco) for the first quarter of 2025 were in line with its expectations of SAR 94 billion, and with its average forecast of SAR 96.4 billion, while Aramco's profits amounted to about SAR 95.7 billion.

Aljazira Capital indicated that it continues to recommend increasing its positions on Aramco's stock, setting the target price for the company's stock at SAR 29.6 per share.

She added that Aramco's stock is currently trading based on its 2025 forecasts, with an EV/EBITDA multiple of 7x and a P/E ratio of 15.6x. The stock's dividend yield for 2025 is expected to reach 5.3%.
The research firm explained that Aramco's profits resulted from a 410 basis point increase in the operating profit margin to 44.5%, compared to 40.4% in the fourth quarter of 2024.

She added: The decline in depreciation and amortization, due to the absence of non-recurring exploration asset losses recorded in the previous quarter, along with a decline in selling, general and administrative expenses due to lower service, labor and shipping costs, supported operating margins.

Aljazira Capital expects Aramco's profits to reach 388 billion riyals by the end of 2025, rising to 414 billion riyals in 2026.

According to the report, revenues increased by 0.2% compared to the previous quarter, reaching SAR 429.6 billion, in line with expectations of SAR 429.7 billion. Higher prices for crude oil, refined products, and chemicals, along with a slight increase in hydrocarbon volumes, contributed to the revenue growth. However, lower sales volumes in the exploration sector slowed overall revenue growth.

Aljazira Capital explained that the sharp decline in oil prices and global economic challenges that raise concerns about crude oil demand are likely to impact Aramco's earnings in the coming quarters.

It also forecasts a 3.5% decline in estimated revenues for 2025 compared to the previous year to SAR 1.74 trillion, largely due to an expected decline of approximately 12% in average oil prices and weak demand in the refining sector. Dividend distributions are also likely to decline in 2025 to approximately SAR 1.32 per share and SAR 1.34 per share in 2026. However, shifts in global trade, such as sanctions and tariffs imposed on exporters and competitors, may boost demand for Saudi crude oil in the near term, which will see an increase in production starting in the second quarter of 2025.

The company continues to be well positioned for long-term growth, supported by the easing of OPEC+ cuts, increased gas production (including the first and second phases of the Jafurah field), and increased refining capacity.