Credit Suisse cuts target on Dubai's Drake, Arabtec

Brokerage cites lower margin estimates and slump in contract awards for construction companies
Credit Suisse cuts target on Dubai's Drake, Arabtec
Credit Suisse cut its price target on Dubais Drake & Scull International (DSI) and Arabtec
By Reuters
Thu 08 Sep 2011 12:45 PM

Credit Suisse cut its price target on Dubai's Drake & Scull International (DSI) and Arabtec citing lower margin estimates and a slump in contract awards for the companies.

Property prices in Dubai have been under pressure since late 2009, when the financial crisis and a drop in oil prices ended a six-year economic boom in the Gulf region.

The brokerage cut its share-price target to AED1.26 from AED1.3 for contractor DSI and to AED1.34 from AED1.47 on Arabtec, the largest builder in the United Arab Emirates by market value.

Credit Suisse said it maintained its preference for DSI over Arabtec on the back of strong backlog growth for DSI, compared with stalled growth and declining profitability for Arabtec.

Arabtec's second-quarter net profit fell 74 percent, missing analysts' forecasts.

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