stc (7010.SE): 3Q26 Preview: Resilient CBU and continued Wholesale strength, with tougher headwinds in Business

We preview expectations ahead of stc's 3Q26 results (Oct 28th), where we see the quarter setting up for a resilient underlying CBU momentum (mobile and fixed), continued strength in Carrier/Wholesale, and an acceleration in Specialized, partially offset by continued softness in Channels amid supply-chain frictions and mix discipline, and a more challenging Business (EBU) comp with a short-term public-sector project in 2Q gradually rolling off. Overall, we model revenue of SAR 20,191m (+4.8% YoY), EBITDA of SAR 6,461m (32.0% margin) and net profit (ex-NCI) of SAR 3,438m. On our updated forecasts, we sit 1% below consensus on revenue and in-line on EBIT for the quarter. With the shares trading at 14x 1y fwd P/E for a 5.1% dividend yield and 4.3% FCFE yield, we remain Neutral and argue risk/reward is balanced for a market leader with clear thematic optionality (center3 – data centres / fintech), but we see limited near-term catalysts to drive a re-rating.