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Investing.com - UBS has lowered its price target on Saudi Arabian Oil Co. (TADAWUL:2222) to SAR26.00 from SAR27.00 while maintaining a Neutral rating ahead of the company’s second-quarter 2025 results expected on August 5.
The price target reduction reflects UBS’s expectation that lower oil prices will continue to weigh on Aramco shares in the near term, despite recent production increases from OPEC+ partners who have accelerated the unwinding of production cuts.
UBS notes that Aramco faces a challenging dynamic where it would be difficult to simultaneously raise production and enjoy higher oil prices, a concern they had previously highlighted in their research.
The firm observes that while oil prices have held up better than expected until recently, the price drop more than offsets the positive volume effect from increased production, leading to projected lower earnings and cash flow from operations before an eventual rebound.
Aramco is scheduled to release its second-quarter 2025 financial results on August 5, which will provide further insight into how these market dynamics are affecting the world’s largest oil producer.
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