Mubasher: Ubhar Capital has maintained its “Accumulate” recommendation on Emirates Integrated Telecommunications Co (du), with a target price of AED 5.91 per share, according to a recent report.

This target price offers a benefit of 18.3% to CMP, implying PE’18e of 12.1x and PB’18e of 3.3x.

Du provides one of the highest return of 21.7% on equity among telecom players in the region compared to sector mean of 11.1%, Ubhar said in its report.

The UAE telecom company’s dividend yield currently stands at 6.8% compared to peers’ average of 5.3%. 

“We are positive on the UAE Telecom sector despite of challenges as we see growth in many segments particularly broadband services and wholesale business,” Ubhar Capital added.

The average EBITDA margins of du are estimated at 41% over 2018 to 2022, down from 43% historically on higher operating expenses and upgrading the network towards fully digitalised services.

Du’s EBITDA remains higher than regional telecom average of 39%, the report said.