We arrive at our AED 4.2/share target price, applying a discounted cash flow (DCF) approach. For our DCF, we use a WACC of 7.2% and terminal growth rate of 2%.

The key downside risks to our investment case and target price include: 1) Concentration risk given the fully-domestic nature of the business; 2) Operations in a highly-regulated industry pose uncertainty and inherent risks should regulations change; 3) Execution risks as the company embarks on an expansion strategy across different business segments/geographies as does potential M&A activity.
On the upside, we see the following risks: 1) positive traction within the c-stores revitalization plan, 2) better supplier terms, 3) successful premiumization efforts (higher margins on Gasoline 98), and 4) better-than-expected results from  geographic expansion into Dubai and Saudi Arabia in the near-to-medium term.