Is it cheap or expensive right now?

Latest price vs our fair value. A comparison, not a recommendation.

In plain terms: Al Rajhi Bank trades a few percent below our weighted central fair value — roughly fairly valued, and the whole argument is what its retained capital is worth. On the dividend it pays today (a rising ~half of earnings) the shares look fairly priced near SAR 58; on the value it builds by reinvesting at a ~23% return, the excess-return lenses land at SAR 76–80. It is the world's largest Islamic bank — a retail-led franchise with the Kingdom's deepest low-cost deposit base, earning ~23% on equity at a sector-low ~23% cost-to-income. The bull case (~SAR 80) is durable margin resilience and a step-up to a 55–60% payout; the cautious case (~SAR 58) is a faster SAMA cutting cycle that squeezes the net interest margin and incremental capital earning closer to the cost of equity. What moves it near-term is the rate path and the quarterly NIM print.

Key levels

The 5th–95th and 25th–75th percentile bands from the 50,000-path simulation. Static and pre-computed — independent of the fundamental value.

What drives the odds

50,000 paths, 16 forces: the SAMA/Fed rate path (the NIM driver), oil and the fiscal impulse, Vision-2030 credit demand, the mortgage & retail cycle, TASI beta and passive flows, system liquidity, and inflation — plus event forces: a quarterly earnings surprise, a dividend/payout surprise, a SAMA/Fed policy surprise, a cost-of-risk shift, an oil-price shock, a geopolitical shock, a mortgage-policy change, an index-flow rebalance, and a capital action. Details in the methodology.