Oman Arab Bank SAOG 8/10/2020

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Capital Investments- Monday, August 10, 2020

We initiate coverage on Oman Arab Bank (OAB) with a 12-month target price (TP) of OMR 0.225 per share, offering limited upside to the current market price, and implying a P/E’20 of 16.5x and P/B’20e of 1.0x. We assign it an Accumulate rating. Our weighted average TP is derived using Excess Returns model (80% weight) and peer-group P/B’20e Multiple-based valuation (20% weight). For excess returns, we value the bank using a combination of the book value and a present value of excess returns over the forecast period, i.e. the amount by which 2020-24e profits are expected to exceed the required cost of equity. We use a discount rate of 10.9% and a perpetual growth rate of 3%. The key upside risks to our valuation are (1) lower-thanexpected provisioning costs and (2) better efficiency metrics.

Country : Oman Report Type : Special Edition Report Date : Monday, August 10, 2020 Provided by : Capital Investments Report Size : 1309 View research

Country :

Oman

Report Type :

Special Edition

Report Date :

Monday, August 10, 2020

Provided by :

Capital Investments

Report Size :

1309

View research

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