We value Yamama Cement at SR 74 per share using a discounted cash flow model with a 12.7% discount rate and a 2,5% terminal growth rate. An ACCUMULATE recommendation is issued taking into consideration the earnings’ growth outlook. This is further supported when considering that Yamama is undervalued relative to peers since it trades at a much lower P/E of 13, compared to 15.1 for other Saudi companies.
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