Al Rajhi Capital starts Bupa Arabia with ‘Neutral’ rating

Al Rajhi Capital initiated coverage of Bupa Arabia for Cooperative Insurance (Bupa Arabia), recommending a “Neutral’ rating on the stock with a target price of SAR 93 per share.

“We set a TP of SAR 93 per share in the context of around 7 percent net income for 2018, and leadership position in less fragmented health segment with stable clientele,” the brokerage firm said in a recent report.

The firm has a consistent track record growing faster than the industry (2018 growth at 10.8 percent year-on-year (YoY) versus 5.2 percent industry).

Market share stood at 43 percent in 2018 up from 18 percent in 2009, backed by maintaining pricing discipline and stable loss ratios, it said.

“However, possible risks to the downside include market size decline amid expat levy and stagnant population,” the research firm added.