By Staff Writer 

Emaar Properties is likely to post higher-than-expected revenue and profit for the fourth quarter of 2009 due to more-than-expected unit deliveries in Dubai and international markets such as Turkey, said Credit Suisse. 
Emaar revenue and profit projected to beat forecast in Q4. (EB FILE)
Emaar revenue and profit projected to beat forecast in Q4. (EB FILE)

The global financial services company yesterday gave a “outperform” rating to the Dubai-based developer, with an upside potential of 67 per cent and a target price of Dh5.25. The potential was calculated at the closing price of Dh3.14 on January 25. An HC Securities analyst, on the other hand, told Emirates Business that the agency has set Emaar’s target price at Dh6.6.

Majed Azzam, Mena Real Estate Analyst at HC Brokerage, said: “Our preferred exposure is Emaar given its strong investment portfolio that should benefit from an expected pick up in tourism activity this year and healthy balance sheet. We have a target price on Emaar of Dh6.6 per share, giving an upside potential of 124 per cent.”

Upside potential was calculated on yesterday’s closing at Dh2.95 on the Dubai Financial Market.

The UAE realty exhibited signs of recovery in 2009 with prices gaining roughly eight per cent from the trough. Volumes also picked up in the third and fourth quarters of 2009.

In the report, Credit Suisse said it expects a “moderate” fourth quarter in general for UAE real estate companies, as earnings are mainly a function of delivery of properties that were sold in the past.

It cut the cumulative earnings estimates (2009-2011) for Aldar Properties by eight per cent and Emaar by 27 per cent, respectively, on the back of changes in property delivery schedules. However, it kept earnings estimates unchanged for Sorouh and Union Properties.

Credit Suisse also expects a potential asset sale for Aldar. “We believe that it is likely that Aldar could consider off-loading the cost of the F1 Race Track through a strategic sale (most likely to a government-owned investment vehicle). This would be a positive catalyst as it shows the continued government support for Aldar,” it added.

Azzam said their target price on Aldar was Dh6.2 per share.