Introduction
Saudi Aramco, the world’s most powerful oil giant, just dropped earnings that look boring on the surface — but the second half of 2025 may tell a very different story.
CEO Amin Nasser predicts over 2 million barrels/day in increased demand coming soon. And as voluntary output cuts are reversed and oil prices stabilize, Aramco could become one of the most underpriced large-cap energy trades of the year.
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Financial Performance
Despite lower oil prices, Aramco beat expectations:
- Q2 Net Income: $24.5B (vs $23.7B expected)
- Revenue: 378.8B SAR, down from 425.7B SAR YoY
- Capex: 46.2B SAR, trending below full-year guidance
The resilience amid price pressure signals strength in Aramco’s operating model, especially as refining revenue offsets weaker upstream performance.
Key Highlights
- 📉 Revenue drop YoY due to lower crude prices
- 🔁 Capex remains disciplined; likely to end year below forecast
- 📈 Output to ramp up after OPEC+ cuts end in September
- 💵 Dividend yield still strong at 5.5%
Profitability and Valuation
Even with declining profits, Aramco remains:
- The most profitable company globally by absolute value
- Trading at conservative valuation multiples (~11x forward earnings)
- Offering higher yield than Exxon (3.6%) or Chevron (4.5%)
Given increased output and likely Q3 recovery in oil prices, forward guidance may shift bullish.
Debt and Leverage
- Gearing ratio rose to 6.5% (vs. 5.3% in Q1)
- Two debt issuances totaling $9B in H2 2024 + $5B bond in 2025
- Still comfortably within safe debt territory for a sovereign-backed energy giant
Aramco remains a fortress balance sheet play, despite geopolitical and commodity volatility.
Growth Prospects
“The market fundamentals remain strong.” — Amin Nasser, CEO
- Global oil demand rising in H2 2025
- Saudi GDP up 3.9% led by non-oil sector growth
- Vision 2030 to support diversification, potentially unlocking domestic IPOs or sector spinoffs
Aramco’s exploration of acquisitions could also add inorganic growth opportunities in energy tech and renewables.
Technical Analysis
| Stock | Current Price | Short-Term Target (2–3 weeks) | Medium-Term (3 months) | Long-Term (12 months) | Stop Loss |
|---|---|---|---|---|---|
| Aramco (TADAWUL: 2222) | 33.80 SAR | 35.20 SAR | 37.00 SAR | 41.50 SAR | 32.40 SAR |
📊 Technicals show a potential reversal off multi-month support, with MACD flattening and RSI crossing 50. Volume has spiked post-earnings, suggesting renewed institutional interest.
Potential Catalysts
- End of voluntary OPEC+ cuts in September
- Rising global demand amid Asia’s recovery
- Potential U.S. Fed rate cut (lower USD = bullish oil)
- Q3 earnings beat or surprise dividend hike
- Rebound in Brent crude toward $80+
Leadership and Strategic Direction
CEO Amin Nasser has kept the company resilient through political storms, supply shocks, and demand uncertainty. Under Crown Prince Mohammed bin Salman’s Vision 2030, Aramco also plays a vital role in funding economic diversification, making it both a corporate and national growth engine.
Impact of Macroeconomic Factors
- Fed’s possible dovish pivot supports oil
- Geopolitical risks (Israel/Iran) may trigger short-term price spikes
- U.S. tariffs and slower growth weigh on crude but may also delay competition
The shift away from green investment, paired with surging demand, sets up a favorable macro backdrop for traditional energy.
Total Addressable Market (TAM)
- Global oil market: $2.1 trillion+
- Aramco controls over 10% of global oil supply
- Increased leverage in Asia and Africa (strategic markets for 2025–2030)
Market Sentiment and Engagement
Investor sentiment is cautious post-earnings—but positioning could shift quickly. Institutions are watching:
- Output data
- Dividend adjustments
- Brent/WTI pricing trends
Retail traders in MENA and Asia are showing increased exposure to Aramco ADRs and energy ETFs.
Conclusions, Target Price Objectives, and Stop Losses
Saudi Aramco might be quietly building up momentum for the next leg of the energy rally. With demand set to surge, capex in check, and geopolitical support, this may be the perfect entry point for long-term exposure to fossil fuels.
| Time Horizon | Target Price (SAR) | Stop Loss |
|---|---|---|
| 2 Weeks | 35.20 | 32.40 |
| 3 Months | 37.00 | 33.00 |
| 12 Months | 41.50 | 34.50 |
Discover More
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This analysis serves as information only and should not be interpreted as investment advice. Conduct your own research or consult with a financial advisor before making investment decisions.
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