Research Firm Recommends Buying Modern Mills

Al Rajhi Financial has maintained its recommendation to buy Modern Mills Food Products Company's stock, with a target price set at 37.9 SAR per share, indicating a potential upside of 32% from current trading levels. The report explained that the stock is trading at an expected Price-to-Earnings (P/E) ratio for 2026 of 11.4 times, which is lower than the sector average of 19 times. This is supported by expansion plans that include new projects for feed and food ingredient manufacturing. Additionally, the company recorded a 7.6% increase in profits for the second quarter compared to the same period last year, with revenue growing by 19.6%, despite a decrease in gross profit margin to 34.7% due to rising costs. The report noted that even in a conservative scenario, the stock would still trade at a P/E ratio of 14.3 times based on earnings expectations.

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