Shares of Arabtec Holding are 23.2% undervalued


Shares of Arabtec Holding are 23.2 per cent undervalued, according to the latest research from Emaar Saudi Financial Services.

It says the construction firm's fair value is Dh20.70, while its stock closed on Dh15.90 yesterday and the ESFS research was concluded before Arabtec's awesome first quarter results were announced. These revealed a four-fold increase in its quarter one profits, year-on-year, to Dh234 million.

Arabtec has made a wave of positive announcements this year, including an eye-catching Dh10 billion contract in St Petersburg, Russia's imperial capital. As the UAE's only listed construction firm, it has proved a magnet for local and foreign investors alike. Arabtec is now just below its foreign ownership limit of 49 per cent, so the stock may struggle to make further headway in the near-term, although such a constraint has not been apparent in its 32 per cent increase over the past month.

Arabtec is arguably the Dubai Financial Market's star performer, leaping more than 250 per cent over the past year. However, this increase in its share price has left it overpriced when compared to its peers.