Mubasher: Qatar National Bank (QNB) Financial Services has maintained the price target of Masraf Al Rayan at QAR 34 per share and Market Perform recommendation, according to a recent statement.
Masraf Al Rayan is currently trading at P/B and P/E of 2.0x and 12.9x as per QNB Alahli’s 2018 estimates, respectively, QNB Financial Services said.
“The market is pricing a fundamental P/B (2.0x) and a sustainable RoE (18.5%) vs. our estimates (P/B: 1.8x & RoE: 17.0%). The name trades at a PEG of 1.7x based on 7.8% CAGR (2017-23e),” the brokerage arm of the largest bank in the Middle East and Africa added.
Masraf Al Rayan has reported a net profit of QAR 534.8 million in the second quarter of 2018 that was in line with QNB Financial Services’ estimate of QAR 520.2 million.
“Margins remained under pressure on a YoY basis, but improved sequentially. Net interest margin decreased by 12bps YoY (+6bps QoQ) to 2.40%. NIMs tightened as the rise in cost of funds exceeded the increase in yield on assets. Cost of funds increased by 26bps YoY to 2.41% (-15bps QoQ), whereas yield on assets increased by 15bps to 4.41% (-6bps QoQ). The drop in margins is inline with our expectations,” the report found.
