Saudi stock earnings ratio hits 3-year low

The decline in Saudi companies' profits during the reporting period, combined with the market's profits improving at a faster rate than stock prices rising, led to the market's price-to-earnings (P/E) ratio dropping to its lowest level in three years, at 15.7 times. This decrease reflects that profit growth, led by Aramco which contributed approximately 7 percentage points, outpaced the increase in stock prices, making the market valuation lower despite the index climbing toward nearly 10,889 points. The market continues to move selectively, with liquidity decreasing to 5.1 billion riyals. This suggests that the market is heading toward sustained profit improvement, opening the possibility of regaining higher levels, even as sector disparities persist and corporate results continue to influence overall performance.

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