Avalon Pharma Reiterated at Overweight as Aljazira Capital Notes 'Solid' Q2 Growth

06:44 AM EDT, 08/27/2026 (MT Newswires) -- Aljazira Capital maintained its overweight rating on Middle East Pharmaceutical Industries Co (SASE:4016), d/b/a Avalon Pharma, with a price target of 72 Saudi riyals, as it took note of the company's "solid" earnings growth in the second quarter. "Growth was primarily driven by the Retail channel, which expanded 27.5% Y/Y, while Export sales also grew 11.9% Y/Y. This was partly offset by a c.20% Y/Y decline in Public channel sales as tender sales phased out during the quarter," analysts said in a Wednesday report focused on the pharmaceutical sector in Saudi Arabia. Avalon Pharma logged a 16.1% annual increase in net profit to 28.8 million riyals, while revenue rose 16% to 136.5 million riyals during the second quarter. Noting the pharmaceutical company's robust core portfolio, strategic pipeline and "comfortable" financial position, analysts at Aljazira Capital expect Avalon Pharma to reach its revenue growth outlook of 16% to 17% for full-year 2026. "We forecast a 12.6% revenue CAGR and 12.1% net income CAGR over FY25-30E, although the increasing contribution of these products is expected to dilute gross margins from 62.3% in FY25 to 59.6% by FY30E, given their initially lower trading margins," analysts added.