The growth momentum for UAE-related stocks is expected to continue until 2026, although expectations for these companies are now higher, according to Morgan Stanley analysts.
Analysts, including Ricardo Rezende and Giuseppe Villari, said in a note that 2025 was a memorable year for many UAE-linked companies, supported by a highly supportive economic environment and helpful regulatory measures.
They added that the valuations of most names still reflect a very positive outlook, even though some potential private drivers of the stocks - such as season tickets for the public parking group Parken and new gates for toll operator Salik - may not be as relevant as they once were.
Dubai’s main market index has advanced so far this year, supported by optimism about the upcoming fourth-quarter earnings season.
Against this backdrop, Morgan Stanley analysts upgraded Dubai Taxi’s rating to overweight from equal weight, predicting the company would outperform its peers thanks to easing concerns about its partnership with ridesharing company Bolt.
Expansion is also expected to accelerate in other emirates this year, along with the pilot testing of self-driving taxis in Dubai.
Analysts said: Although it is not a significant value driver in the short (or even medium) term, we expect the topic to become more prominent in investor discussions, particularly regarding the trade-off between higher capital expenditures (compared to a standard taxi) and lower operating expenses.
Morgan Stanley also gave overweight forecasts to both ADNOC Distribution and Empower, with strategists arguing that the Abu Dhabi state-owned oil company and the cooling services provider are trading at a significant discount to historical levels.
Meanwhile, Salik's rating was downgraded to Equal Weight. Business is expected to return to normal this year, following a strong 2025 performance boosted by core traffic growth, the commissioning of two new gates, and dynamic pricing.
They wrote: If new gates are to be incorporated to achieve a decent height in Salik, then it is time to become more cautious.
