Dubai- Mubasher: Emaar Properties' price target (PT) was reduced 2.75% to AED 9.22 from per share from AED 9.48, according to MubasherTrade Rresearch (MTR).
The company was put under valuation after the current turbulence in Turkey, where Emaar has a lot of investments, which include Emaar Square Mall that represents 67% of its total investments.
"As per our estimates, we expect that Turkey will account for 5.7% of EMAAR's total revenues and 5.5% of EMAAR's total EBITDA on average during the period from 2016 to 2020. Excluding Emaar Turkey from our estimates, we would expect EMAAR's consolidated revenues to grow at a 2.2pp lower CAGR (2015-2018) of 15.1% versus 17.3% in our current estimates. Meanwhile, EMAAR's consolidated EBITDA would grow at a 2.4pp lower CAGR of 16.6% versus 19.1%," the report said.
MubasherTrade Rresearch's (MTR) latest note on the stock highlighted the adverse impact on the company in case it lost its business in Turkey.
"We maintain our Buy/Moderate Risk rating and price target (PT) of EMAAR at AED9.48/share, implying an expected total return (ETR) of 41.5%. However, we put a 3% of our valuation at risk in case of prolonged unrest in Turkey. For more details, please read our Initiation of Coverage report dated 3 July 2016 (Strong fundamentals remain intact — Initiate with Buy/Moderate Risk). We note that since then, EMAAR's stock has advanced by 8%," MTR added.
