MubasherTrade raises DIB’s PT to AED 8.7

MubasherTrade raises DIB’s PT to AED 8.7
DIB’s profits rose 10% over the first three quarters of 2017 to reach AED 3.3 billion
DIB DIB -0.49% 6.04 -0.03

Dubai – Mubasher: MubasherTrade Research on Thursday increased the price target (PT) of Dubai Islamic Bank’s (DIB) stock to AED 8.7 per share with a “buy” recommendation and moderate risk outlook.

DIB’s stock last traded at AED 6.21 on the Dubai Financial Market (DFM).

“We value DIB based on the average of two different valuation models: Excess return model (AED 8.7 per share) and Warranted Equity Valuation (WEV) model (AED 6.98 per share),” MubasherTrade Research said.

“This yielded an average fair value of AED 7.84 per share, implying a 12-month PT of AED 8.72 per share—an expected total return (ETR) of +40%. We used a cost of equity of 11.2% and a terminal growth rate (TGR) of 3.0%. At our 12M PT, DIB would be traded at 2018e PBV and PER of 2.4x and 11.6x, respectively,” the research firm highlighted in its newest report on the stock.

DIB’s profits rose 10% over the first three quarters of 2017 to reach AED 3.3 billion, compared to AED 3.01 in the comparative period in 2016.

The bank’s income went up 17% to AED 7.51 billion, while financial assets increased by 15% year-on-year to AED 201.2 billion versus AED 175 billion by the end of 2016.

“We believe that DIB should maintain a strong capital base going forward to sustain its usually-high loan growth,” MubasherTrade commented. 

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Source: Mubasher

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