The average target price of ISRS.TA is 94100 and suggests 5% downside potential. Usually, this means a SELL recommendation among investment firms, or a recommendation to decrease one's position in this instrument in the next 12 months. The most optimistic analyst has a target price of 94100.0. This is lower than the current market price, meaning that even the most optimistic analyst does not see upside potential. On the other hand, the most pessimistic analyst has a target price of 94100.0. This is equivalent to 5% downside potential in the worst case. 

Isras Investment Company Ltd operates in the real estate sector in Israel. The company engages in the residential and construction projects. It also plans, constructs, and manages projects for rent, as well as acquires, develops, manages, and operates other properties, including a protected housing. The company was founded in 1950 and is based in Tel Aviv-Yafo, Israel. Isras Investment Company Ltd is a subsidiary of Arad Investment & Industrial Development Ltd.

Israel

Isras Investment Company Ltd

Real Estate

The company has a track record of regular dividend payments. It has paid dividends in each of the past ten years. Dividend per share (DPS) has grown yearly, and there is an evident trend. In the past 12 months, the dividend yield has been strong and significantly above its peers. At the same time, the average five-year yield has been significantly higher and exceeded most of its peers. The company distributes nearly all its profit as dividends (payout ratio above 90%, a negative factor). It will not be easy to sustain such an extreme payout ratio. It may also indicate a company's lack of profitable growth opportunities, which suggests doubtful prospects. On average, the company pays dividends every four months. 

ISRS.TA reported revenue of ILS 702mn in the last 12 months, up 20% from FY23. At the same time, the dynamics of cash flow, as measured by free cash flow (FCF), were drastically different. EPS grew 16% from FY23 to ILS 101.05.

The stock has been growing steadily in the past six months, adding 12% in total. The stock has outperformed its global peers from the same sector and industry (as shown above), surpassing them by 14ppts in total. This is largely true for peers from the same country and sector. With respect to the stock's valuation against its peers, its overall price performance is 'fair'.

Historically, ISRS.TA has reported very strong net margins compared to its global peers. Specifically, in the last 12 months, this metric equalled 76.0%, down from 79.9% in FY23. 

Isras Investment Company Ltd reported a return on equity (RoE) of 11.9% in the last 12 months, up from 10.8% in FY23. 

Another important profitability metric, return on assets (RoA), amounted to 5.5% in the last 12 months, an increase from 5.0% in FY23. 

In the last 12 months, the return on capital employed (RoCE) grew to 5.8%, above the peers. 

The ratio of return on invested capital (RoIC) to the weighted average cost of capital (WACC) has been 1.5 in the past several years. This ratio implies a good shareholder value creation. 

The institutional, legal, and compliance risks associated with the company's country are minimal. In combination with stringent business standards, shareholder rights are very highly protected.

ISRS.TA has poor trading liquidity. The average private investor can sell his common position in the stock in a single trading day under normal market conditions. Liquidity is usually stable and remains extremely favourable on the days with the lowest activity. However, please consider that under highly turbulent market conditions, the trading volume tends to decrease significantly. Another factor to consider is the substantial number of days with zero trading volumes, i.e., without any ability to sell a position. The stock has a tiny market capitalisation, which usually makes its trading liquidity erratic and unpredictable. 

No other major risks have been identified.

The risk of default is high. Among the negative credit factors, we point to weak positions in its industry, slow historical revenue growth, excessive margin volatility, and weak debt servicing capacity. We note robust profitability, among the positive credit factors. 

In highly turbulent market conditions, ISRS.TA is not overly volatile. In other words, the stock will fall less than the index in times of extreme market volatility or shocking company news. Standalone, the worst-day losses (less than 1% of the time) will likely be low. 

In normal market circumstances, ISRS.TA is as volatile as an index. Put differently, without outstanding market volatility or shocking company news, the stock's price will move with the index. The stock's losses on its worst days (less than 1-5% of the time) will range from very low to negligible. We would also like to highlight the negligible intraday volatility of the instrument. 

Considering past and projected metrics, the stock is distinctly 'cheaper' than its peers. In particular, the stock is underpriced on P/E, 'cheap' on EV/EBITDA, undervalued on P/FCF. 

Isras Investment Company Ltd

ILA 97780

5

Isras Investment Company Ltd

ILA 97780

5

Risk factor

Profitability factor

Risk / Profitability

Risk factor

Profitability factor

ILA 97780

About

About

About

About