LILA US (Buy, TP: $13, +102%) Call with CFO Chris Noyes / T-Mobile FWA in Puerto Rico
We hosted a call with Liberty LA’s CFO, Chris Noyes, last week which focused on the very strong operational performance at CWC/Costa Rica, and the imminent turnaround in Puerto Rico (full migration off AT&T from April). We feel good about momentum here, though have cut underlying revenue a touch in Puerto Rico to reflect recently lowered fixed prices in response to T-Mobile’s FWA early March launch. We will watch this closely but with PR fixed BB ~6% of group revenue we don’t think it materially impacts Liberty’s ability to hit their >$1 billion guide; a FCF cut versus previous estimates here is driven by one-off tax / vendor refinancing in 2024 (~$100m) and earlier refinancing costs (~$150m/annum). If plans are hit, we see the stock on >30% FCF yield in 2025, or 23% after stock compensation. Target is $13; current price implies Puerto Rico (and Costa Rica, parts of CWC) priced at zero.
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