ADNOC Distribution (AO) | Buy | Q1 first take: strong beat, guidance reaffirmed

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ADNOC Distribution (AO) | Buy | Q1 first take: strong beat, guidance reaffirmed

ADNOC Distribution Buy | Target Price: AED4.35

Company description Management

ADNOC Distribution is the leading mobility retailer in the UAE. At year-end 2025, Bader Saeed Al Lamki, CEO

it had 1,010 service stations spread across the UAE (567), Saudi Arabia (199), and Ali Siddiqi, Acting CFO

Egypt (244). Furthermore, it operates non-fuel retail activities, including Athmane Benzerroug, Chief Strategy, Transformation & Sustainability Officer

convenience stores and vehicle inspection centres, car wash, lube change, EV

charging infrastructure, and property management. It also provides fuel and Key shareholders

services to B2B customers. Free float 22.98%

ADNOC Group 77.00%

Treasury shares owned 0.02%

Investment case Valuation methodology

Solid outlook driven by favourable demographic trends Our target price derives from a blend of a DCF method (40%

combined with robust economic growth prospects for the UAE weighting), and a value based on a target EV/EBITDA multiple

translating into increased mobility needs, more vehicles on the (60% weighting). It is rounded to the nearest AED0.05.

roads, and rising fuel demand (assuming normalisation post- Our DCF approach (WACC 7.1%, g 1.5%) points to a fair value of

Iran war). AED4.25 per share.

Highly cash-generative retail fuel business, supported by stable, Our target EV/EBITDA multiple of 14.0x applied to our 2027-28E

regulated unit fuel margins in the UAE, backed by a supply EBITDA estimates underpins a fair value of AED4.40 per share.

agreement with ADNOC that protects profitability from Risks to our rating

inventory losses and retains upside from inventory gains. Weaker-than-expected fuel demand in the UAE, potentially