New Street Research - FRONTIER COMMUNICATIONS PARENT INC (FYBR) FYBR 1Q24 Quick Take: Strong financial results powered by ARPU growth

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New Street Research

Jonathan Chaplin

EUR 9240.00 For Business Accounts Only

FYBR 1Q24 Quick Take: Strong financial results powered by ARPU growth

Financial results were better than expected, driven by very strong ARPU growth. Subscriber trends were mostly in-line. We suspect EBITDA estimates have to inch up towards the high-end of guidance following these results. This is the one investable broadband stock that is delivering strong results in a difficult market.

03/05/2024 1 EN

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FRONTIER COMMUNICATIONS PARENT INC

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US35909D1090

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New Street Research

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Pan European Telecom Services and Cable

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Analysts

Jonathan Chaplin

Other Reports on these Companies

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FYBR Quick Hit: Frontier in discussions for a potential JV with Stonepeak

Press reports indicate that Frontier is in discussions with Stonepeak, a private equity firm, for a potential joint venture to deploy fiber. Press reports also mention that the JV will need initial funding between $500MM and $1BN. While there is no mention of the number of locations that the JV plans to deploy fiber to, in our report we had assumed that the JV deploys fiber to 3MM locations.

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New Street Research

Frontier Model Update

We are updating our model mainly for the updated thoughts on the timing of ACP that we covered in this report. The changes to subscriber estimates are minor as Frontier’s exposure to ACP is small. We are above printed consensus on fiber net adds and EBITDA for the quarter and for the year. The other changes to estimates are minor. Our long-term thesis remains unchanged. Price target is $52.

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We have updated NPS and industry trends for the latest quarter of data. Customer growth has settled in a tight range of 2%+. Revenue per customer accelerated, driving an uptick in service revenue and EBITDA growth for the group. NPS trends continue to improve for the wireless industry, with Dish now leading the pack. We run through thoughts on both trends in this note.

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FYBR 1Q24 Quick Take: Strong financial results powered by ARPU growth

FYBR Quick Hit: Frontier in discussions for a potential JV with Stonepeak

Frontier Model Update

1Q24 Wireless Trends

Feedback from call with Orange IR on French pricing - back book increases might offset front book changes Orange (Buy, TP: €14, +51%) Altice France - Most Preferred Iliad - Equal Weight

FYBR Quick Hit: Frontier in discussions for a potential JV with Stonepeak

PYPL US (Buy, TP: $80, +33%) ADYEN (Buy, TP: EUR1,800, +58%) Visa-Mastercard Settlement blocked: Rise of the Merchants revisited

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