Stock Analysis & Valuation Itissalat Al-Maghrib (IAM) S.A. (IAM.PA)

• Previous Close: €10.00
• Sector Valuation Confidence Level: High

Valuation method	Value, €	Upside, %
Artificial intelligence (AI)	1.10	-89
Intrinsic value (DCF)	3.41	-66
Graham-Dodd Method		n/a
Graham Formula	1.50	-85

Strategic Investment Analysis

Company Overview

Itissalat Al-Maghrib (IAM) S.A. is a leading telecommunications provider in Morocco, offering a comprehensive suite of services including mobile, fixed-line, Internet, and broadband solutions. Founded in 1998 and headquartered in Rabat, IAM operates as a subsidiary of Emirates Telecommunications Group Company PJSC (Etisalat), leveraging its parent company's expertise to enhance its market position. The company serves both individual and business customers, providing cutting-edge connectivity solutions and selling mobile terminals, broadband equipment, and connected accessories. As a key player in Morocco's telecom sector, IAM plays a pivotal role in the country's digital transformation, supported by its robust infrastructure and extensive network coverage. With a market capitalization of approximately €8.79 billion, IAM is a significant contributor to the Communication Services sector in North Africa, driving innovation and connectivity in a rapidly evolving industry.

Investment Summary

IAM presents a stable investment opportunity with its dominant position in Morocco's telecommunications market, backed by strong revenue (€36.7 billion) and net income (€1.8 billion). The company benefits from its affiliation with Etisalat, providing strategic advantages in technology and operational efficiency. However, high total debt (€24.4 billion) and significant capital expenditures (€11.7 billion) pose financial risks. The low beta (0.462) suggests lower volatility compared to the broader market, appealing to risk-averse investors. Dividend payments (€0.52 per share) add income appeal, but investors should monitor debt levels and competitive pressures in Morocco's telecom sector.

Competitive Analysis

IAM holds a dominant position in Morocco's telecommunications market, supported by its extensive infrastructure and strong brand recognition. Its affiliation with Etisalat provides access to advanced technologies and economies of scale, enhancing its competitive edge. The company's diversified service portfolio, including mobile, fixed-line, and broadband, allows it to cater to a broad customer base. However, IAM faces intense competition from local and regional players, which could erode market share. Regulatory challenges and the need for continuous capital investment in network upgrades also present hurdles. Despite these risks, IAM's strong cash flow generation (€11.6 billion operating cash flow) and strategic partnerships position it well for sustained growth in Morocco's digital economy.

Major Competitors

• Inwi (INWI.MA): Inwi is a major competitor to IAM in Morocco, known for its aggressive pricing and innovative mobile and internet services. The company has a strong digital-first approach, appealing to younger demographics. However, Inwi lacks the extensive infrastructure and financial backing of IAM, limiting its ability to compete on scale. Its market share is smaller, but its focus on affordability and digital services poses a threat to IAM's dominance.
• Orange S.A. (ORAN.PA): Orange operates in Morocco through its subsidiary Orange Maroc, competing directly with IAM in mobile and broadband services. Orange benefits from its global brand and technological expertise, but its market share in Morocco is smaller compared to IAM. The company's strength lies in its international presence and customer service, though it faces challenges in matching IAM's local infrastructure and regulatory familiarity.
• Zain Group (ZAIN.KW): Zain Group operates in multiple Middle Eastern and African markets, though its presence in Morocco is limited. The company's strengths include its regional footprint and innovative mobile services. However, Zain lacks the localized infrastructure and market penetration of IAM in Morocco, making it a minor competitor. Its focus on other regional markets reduces direct competition with IAM.