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Valuation & Risks ( ALDAR.AD ) Disclosure / Price Chart(s) / Valuation & Risk
Fundamental Equity Research
We use a combination of DCF and SOTP based approach to value Aldar and arrive at a target price of AED 11.5/share. For DCF, we use 2026-29E discounted FCFs using 10% WACC and 2.5% terminal growth rate delivering a fair value of 13.4/share. For SOTP, we use multiples based valuation taking NTM EBITDA of each division and target sector NTM EV/EBITDA multiples applying a conglomerate discount to arrive at a fair value of 9.4/share.

We identify some of the main downside risks that can prevent the share price from reaching our target:
• Sharp correction in property price driven by sizable supply-demand gap
• Lower oil price impact on system liquidity and customer sentiments
• Decline in Abu Dhabi's attractiveness as a place to settle if the quality of life deteriorates (e.g. infrastructure growth lags population expansion)
• Competitive risks from other local and international real estate players
• Escalation in regional geo-political landscape negatively impacting Abu Dhabi’s attractiveness as a long-term settlement hub
• Potential reverse migration of expats in case of resolution of specific geo-political events (in case their movement was driven by the aforesaid event)
• Limited growth from some of the international businesses (e.g. SODIC and London Square)
• Currency fluctuations impacting international operations performance in AED terms
• Appreciation in USD negatively impacting the attractiveness of Abu Dhabi/UAE as a tourism hub
• Aldar's contractors not delivering on time leading to delayed revenue recognition from backlog
• Dilutive M&A and governance related risks

 

 

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