Vivo (Buy, TP: BRL61, +30%) Vivo Q3 23 – Solid quarter, strong FCF paves way for bumper cash return
Vivo reported solid Q3s, with revenue and EBITDA (stripping out a BRL175m gain) 1.2% and 1.5% ahead of consensus, respectively. Service revenue grew 7.5% YoY (similar to Q2) driven by 3% growth in fixed and 9% in wireless, and remaining well ahead of inflation (which is creeping up again in Brazil). FCF generation, supported by falling capex, remains a highlight, with YTD of BRL7.6 billion representing >10% yield to equity – there will be more to come in Q4. FCF paves the way for the BRL5 billion capital stock reduction which we expect in early 2024.
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- Pan European Telecom Services and Cable
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