2Q26 First Take: Slight beat with FY26 EBITDA growth guidance upgraded; Conf call pointing to broad use of proceeds from VOD deal

Research evidence excerpt

2Q26 First Take: Slight beat with FY26 EBITDA growth guidance upgraded; Conf call pointing to broad use of proceeds from VOD deal

Karin So AC CEEMEA Equity Research

(971) 4561-2090 30 July 2026 J P M O R G A N

karin.so@jpmorgan.com

Investment Thesis, Valuation and Risks

e& (Overweight; Price Target: Dh22.30)

Investment Thesis

e& offers exposure to one of the most attractive telecom market structures globally: a

rational UAE duopoly, above-average population growth, and a supportive regulatory

backdrop, underpinning industry-leading profitability and cash returns. While questions

remain on longer-term UAE population growth, given geopolitics, our sensitivity work

suggests even a consecutive 5% population decline in 2026-2027 would translate to only a

~2% decline in group net profit, which we view as manageable. Beyond the UAE, we think

the market underappreciates the inflection underway across the international portfolio, with

a credible path to stabilisation in Morocco, strong organic growth and pricing revisions

mitigating FX headwinds in Egypt, and a consolidation-driven turnaround in Pakistan.

Recent cost optimisation at Careem also supports an improving profitability path for e& life.

Management's M&A stance appears increasingly selective and focused on integration of

existing assets, which combined with a solid balance sheet, supports sustainable momentum

in cash returns as portfolio profitability improves and capex normalises. We see growing

headroom for higher dividends while retaining flexibility for growth. With shares trading

at 13x 26Y P/E for a 5.2% dividend yield, a ~11% discount to peers and close to 1 std dev

below the 3-year average, we rate the stock OW.

Valuation

We value e& on a sum-of-the-parts (SOTP) basis, with each individual segment valued