Model update and Q4 preview – another strong year
We have revised our full year earnings expectations for 2024 before the earnings releaseon 25th of February. Our 12-month, ex-dividend target price is set at HUF 1,556, implying a
11% upside potential, while including next year dividend payment it results in a 20% total
return upside potential. However, given the limited upside potential, we downgrade our
recommendation to Accumulate from Buy. Currently, MTelekom trades at 7.0x P/E and
3.9x EV/EBITDA multiples based on 2025 estimates. The biggest risk we currently see is
the renewal of MTelekom’s dividend policy. The current policy expires in this month,
however we expect a positive outcome for the shareholders of MTelekom given the low
debt level and increasing cash position. We continue to assume a POR of 70%.
Magyar Telekom is engaged in the providing fixed line and mobile telecommunication services for public and business customers. Co. provides voice and non-voice (SMS, MMS, internet, data and content provision) within mobile services; voice, data, internet and TV services within fixed line services. In addition, Co. sells equipment needed for using fixed line and mobile services (telephones, tablets, notebooks, TV sets etc.).
Concorde Securities Ltd. is Hungary’s leading independent company engaged in investment banking activities. It provides its clients with integrated financial services, including securities trading, research, corporate financing advisory, capital market transactions, wealth management and investment advisory. The operational management of the company is the responsibility of the CEO, while the owners/managers (who control one-third of the company through their shares and options) are in charge of its strategic governance. Concorde Securities Ltd. is a member of the Budapest, Frankfurt, Warsaw and Bucharest stock exchanges, as well as of the Hungarian Association of Investment Service Providers.
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