Earnings Miss, Valuation Concerns Remain

Research evidence excerpt

Earnings Miss, Valuation Concerns Remain

Saudi Arabia | Utilities

ACWA EquityMayResearch11, 2026

ESTIMATE CHANGEEarnings Miss, Valuation Concerns Remain

ACWA's Q1 26 operating profit missed consensus estimates by 30%. Its trailing RATING UNDERPERFORM

12-month operating profit has been flat, despite significant investments over PRICE SAR182.10^

the years. Still, the stock continues to price in aggressive growth, trading at PRICE TARGET | % TO PT SAR160.00 | -12%

c.55x 2026E PE. ACWA remains relatively insulated amid geopolitical tensions 52W HIGH-LOW SAR309.72 - SAR154.50

and is structurally leveraged to the renewables transition; however, the valuation FLOAT (%) | ADV MM (USD) 29.6% | 61.39

remains a key overhang for the investment case, in our view. MARKET CAP SAR139.6B | SAR139.6B

TICKER ACWA AB

Q1 26 earnings miss: ACWA's operating profit of SAR729mn declined 16% y-o-y and was 30% ^Prior trading day's closing price unless otherwise noted.

below consensus and 40% below our estimates. Revenues of SAR2bn were up 3% but 9% lower

than consensus and 3% below our estimates. The key reason for the operating profit drop was a

sharp decline in development, procurement, and construction services revenues and profits, which FY (Dec) CHANGE TO JEFe JEF vs CONS

declined 57% y-o-y from SAR526mn in Q1 25 to SAR227mn. This was more than enough to offset 2026 2027 2026 2027

slightly higher contributions from the rest of the operations and acquisitions. REV -5% +5% NA NA

EPS -11% +16% -9% +23%

ACWA is relatively well placed in the current geopolitical environment…

Distributed assets: Compared to most of its utilities peers in the region, ACWA's assets are 2026 (SAR) Q1 Q2 Q3 Q4 FY

distributed across geographies.