reports
- Soomit Datta
NU US (Neutral, TP: $12.5, -2%) Nu Holdings Q2 24 Quick Take: In-line...
NU reported numbers after close which, after some heroic recent quarters, had some more moderated trends. Revenue was in-line - or a slight miss depending on which consensus you look at - originations slowed, loans missed expectations, whilst NPLs were up as expected (partly due to seasonality). NII was in-line with our expectations. Notably Mexico continues to run an ever lower loan to deposit ratio, with deposit success far outpacing loan expansion at this stage.
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +32%) VIVT3 (Buy, TP: BRL61, +26%) AMX (Buy, TP...
TIM Q2s: As with Claro and Vivo, TIM delivered a robust set of Q2 results. Both revenue and EBITDA beat consensus by ~1% though at EBITDAaL TIM outperformed with a +5% beat, supported by stable Leases compared to Q1. Service revenue maintained consistent growth in-line with previous quarters (~7% y/y) from faster postpaid, and maintained negative prepaid. H1 EBITDA (and revenue) continued to trend slightly above the FY24 guidance. Despite management’s confidence in achieving targets for the year...
- Soomit Datta
- Soomit Datta
VIVT3 (Buy, TP: BRL61, +23%) Vivo - Solid underlying Q1s – headline E...
Underlying Q1 trends remained robust at Vivo, with revenue in-line (+7% y/y growth) and headline EBITDA missing (1.5%) only due to other items in the cost base (gains/sales) fluctuating. Excluding this and underlying EBITDA of +9% y/y was steady on Q4, and comparable to TIM’s +10% (reported yesterday). Vivo’s mobile service revenue was the strongest in Brazil vs peers, offset slightly by lower fixed growth (the more volatile data/IT business slowing this quarter).
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +24%) TIM Brasil - Solid Q1s, trending ahead o...
TIM reported solid Q1 24 earnings overnight, coming in a shade of ahead of estimates (1% at EBITDA). Service revenue growth remains robust at >7% y/y, with some seasonality potentially impacting Q1 pre-pay revenue; EBITDA of +10% y/y and EBITDAaL +20% y/y is also very strong (and well ahead of 4% inflation), the latter enjoying historic lease reductions (though these are now sequentially stabilising). Q1 trends are tracking a touch above FY guide, potentially enabling further earnings uplift.
- Chris Hoare
- James Ratzer
Telecom Italia (Buy, €0.35, +58%) Piecing together the puzzle post-CMD
We recently attended the Telecom Italia CMD in person and the management dinner afterwards. Given the stock fell by 20%+, it’s fair to say the event didn’t quite go as initially planned. In this note we review the situation now the dust has settled a bit, and now we feel we have better visibility on the key drivers behind the operational forecasts and the below-the-line cash items.
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +27%) TIM B - Improving cash returns, though t...
TIM Brasil updated on its cash return policy today, targeting ~BRL12 billion of shareholder returns from 2024-26. This is a strongly improving trend (BRL2.9 billion for 2023), annualizing out at a 9% yield in Brazil (where headline interest rates are falling sharply) and we see this as very supportive for the equity when combined with the strong fundamentals. At the same time, TIM will remain net cash (ex leases) over this forecast period and we see a bigger day of reckoning coming for the Brazi...
- James Ratzer
- James Ratzer
- James Ratzer
- Soomit Datta
TIMS3 (Buy, TP: BRL23, +27%) TIM Brasil - Solid Q4, mid-term guide hi...
TIM Brasil reported solid Q4s, with a mid-term outlook which sees consensus at the bottom of the newly guided to range for service revenue (5-6%) and EBITDA (6-8%) out to 2026 (i.e. real growth given ~3.5% inflation expectations looking forward). Given TIM’s ability to meet or beat in the past, this suggests earnings momentum can continue to be strong.
- Soomit Datta
LatAm Telcos – 2024 Outlook: Top picks Brazil (TIM and Vivo) and Megac...
After strong stock performance in 2023 we think the Brazilians will continue to perform into 2024 on the back of solid wireless fundamentals: rising prices, revenue/EBITDA > inflation, falling capex/sales – and with IOC (tax) risks in the rear view for now. Shareholder returns are also sector leading whilst valuations are attractive (notably versus quickly falling rates).
- Soomit Datta
TIM/Vivo - Maintain Buys; Solid Wireless supported by improving Tower ...
Despite the 40-45% rally YTD we continue to like the Brazilian Telco stocks. Wireless operator dynamics remain very favourable with FCF supported significantly for TIM in the near-term by Oi tower decommissioning, with a potentially broader reset for the industry relative to the Tower cos over the mid-term (part of a broader EM theme perhaps following IHS in Nigeria).
- Lindsay Whipp
PSA Digital Payments: Brazil’s Pix – The Great Equaliser
Brazil’s Pix is the fastest adopted payment system globally and its Nov 2020 launch was nothing short of revolutionary, practically making cash a thing of the past. By contrast, Japan’s road to a cashless society has been a more winding one. In this article, which considers Japan’s approach in a global context, Lindsay Whipp contrasts the two governments’ top-down strategies for promoting digital payment.
- Soomit Datta
NU US (Neutral, TP: $8.5, from $8.1) Nu Holdings - Q3 23: Updated est...
NU reported Q3s after close last night. Financials were generally a touch ahead of formal sell side expectations (revenue 4%, NII 3%) though the market seemed to be geared up for a stronger beat. The net loan book, furthermore, missed by 8% and was a focus of concern on the earnings call; the miss coming from a combination of FX (sell side not seemingly capturing quarter-end BRL weakness), a small accounting change (>1% of the miss), but ultimately the anticipated sequential acceleration not qui...
- James Ratzer
- Soomit Datta
TIMS3 (Buy, TP: BRL22, +33%) TIM Brasil - Investor Day feedback/ Q3s:...
TIM hosted an Investor Event in NY yesterday and which followed the earlier announcement of lifting the FY 23 dividend to BRL2.9 billion (consensus BRL2.6 billion) and the previous evening’s very strong Q3 numbers. Focus today was on FCF margin expansion, shareholder remuneration and the opportunity in B2B.
- Soomit Datta
- Soomit Datta
Unfortunately, this report is not available for the investor type or country you selected.
Report is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.