reports
- Chris Hoare
Global EM Telcos & Towers – NSR EM Top picks Feb 25 update. Top-8 beco...
We update the NSR GEM Top Picks list. No stocks are dropped, and we add LILAC and TIM Brasil to our list, extending it to a Top-10 list from Top-8. Our picks had a good start, up 12% on average since the start of the year. This note also includes key news & other thoughts in order to help investors generate alpha within the EM Telco space.
- Chris Hoare
Global EM Telcos & Towers Introducing the NSR Global EM Telco & Tower...
In a separate note published last week we introduced the NSR GEM-Top 8. However, many of the stocks in that list are not liquid and so, given the tailwinds we now see in the Telco industry we introduce a second list – the GEM Telco & Towers Liquid Compounders; large cap, well-managed telcos in attractive markets at cheap valuations that are likely to generate market-beating returns over time. These are the best large cap investments in the Global EM Telco & Towers space we think.
- Soomit Datta
LatAm Telcos – TIM/Vivo to Neutral; Wireless MVNO threats - NuCel / Br...
As well as a broader regional recap, we focus on wireless MVNO threats: NuCel in Brazil, recapping also the experience of AMX in Mexico with Bait (Walmart).
- Soomit Datta
Liberty LA (BUY, TP: $11, +61%) Liberty LA (BUY) - Puerto Rico: LILA ...
Following Q3 results, PR guidance pull and a call with CFO, Chris Noyes, we are cutting estimates on Puerto Rico; we now value the local equity at zero ($3/share previously).
America Movil, S.A.B. de C.V.: Update following rating affirmation
Our credit view of this issuer reflects its strong market position, offset by its intense competition.
America Movil, S.A.B. de C.V. - September 2024 (LTM): Peer Snapshot
Compares key performance metrics against industry peers.
- Soomit Datta
VIVT3 (Buy, TP: R$61, +15%) TIMS3 (Buy, TP: R$23, +43%) AMX (Buy, TP: ...
Rounding off the reporting season, Vivo reported solid Q3s results with a 3% beat at EBITDA and the best postpaid net adds in Brazil this quarter.
- Soomit Datta
Mexican Cable/FTTH - Q3 24: MEGA and TPLAY the strongest performers; T...
The Mexican fixed market experienced a slight slowdown in revenue and EBITDA trends in Q3 but KPIs remained robust with 423k net additions and continued growth in Broadband penetration.
- Soomit Datta
AMX(Buy, TP: $22, +34%) America Movil - Q3 24: Accelerating growth, 4...
AMX reported a good set of Q3 numbers yesterday after close. Both revenue and EBITDA beat consensus by ~4%. Service revenue growth accelerated to 5.5% in Q3 vs. 4.7% last quarter and EBITDA growth accelerated to 7.3% from 6.9% in Q2. Almost all geographies beat.
America Movil, S.A.B. de C.V.: Annual Update
Our credit view of America Movil reflects its regional presence with leading market position and strong credit metrics, offset by intense competition.
America Movil, S.A.B. de C.V. - June 2024 (LTM): Peer Snapshot
Compares key performance metrics against industry peers.
- Soomit Datta
AMX (Buy, TP: $22, +32%) Televisa (Neutral, TP: $3.5, +58%) Megacable ...
AMX and Totalplay emerged as the strong performers in Q2, in terms of KPIs (Telmex the highest BB subs again) and financials (TPLAY 16% EBITDA y/y growth). MEGA continued good momentum, slowing perhaps a touch (and with weaker Corporate). Izzy (Televisa) continues to back off from chasing growth and focus more on FCF - helped by a cut in Cable capex (from $630m to $590m, or 22% of sales to 20%) and with deal synergies to come (MXN400m per Q).
- Soomit Datta
AMX (Buy, TP: $22, +20%) AMX - Q2 24: EBITDA beat, trends high-end/ab...
AMX reported robust Q2 numbers after close, coming in ~3% ahead of consensus EBITDA. Revenue growth of 4.7% is toward the top of the mid-term guide, EBITDA at 6.9% is ahead. Brazil was the standout business (with Claro likely to be performing ahead of TIM and Vivo) whilst Mexico was solid (though holding price flat isn’t helping near-term revenue momentum)
- Soomit Datta
LatAm Fintech into Q2s: FX, rates and Mexico in focus: MELI/NU/DLO/PAG...
It’s a difficult reporting season for US$ reporters when regional FX slips so much: sell-side is generally slow to update (and often updates the immediate quarter, but not FYs). We see FY 24 needing to come down at NU (Neutral) and MercadoLibre (Neutral). DLO (BUY) is also exposed though a Q2 share price collapse, significant de-rating as well as a better H2 should underpin the stock.
- Soomit Datta
Liberty LA (Buy, TP: $13, +45%) cements Chile exit, longer road for AM...
Liberty LA announced this week that AMX will take control of their 50/50 JV in Chile. This isn’t surprising but still cements a good “exit” for Liberty LA (putting zero value on the residual 9% stake this implies a 15.5x exit on FY 23 VTR EBITDA) and requiring a long-term perspective from AMX in order to turnaround the business - though we note recent top line and KPIs look to be (finally) stabilising.
America Movil, S.A.B. de C.V. - March 2024 (LTM): Peer Snapshot
Compares key performance metrics against industry peers.
- Soomit Datta
Liberty LA (Buy, TP: $13, +50%) Liberty LA - Confidence in FCF grows,...
Updating estimates for Q1 we feel much better about hitting expectations for the FCF turnaround. CEO Balan Nair was sounding upbeat on the earnings call about hitting the $45m of monthly EBITDA in Puerto Rico, in our view (crucial to group FCF improvement), and we look at how to bridge that outlook from the reported Q1 number. We push up 2025 Puerto Rico EBITDA.
- Soomit Datta
AMX (Buy, TP: $24, +20%) Investor Day - Upbeat outlook, cash returns l...
America Movil held an investor event in New York today which was, in the main, pretty upbeat for mid-term revenue and EBITDA – a message given credibility by the strong momentum coming out of the Q1s.
- Soomit Datta
AMX (Buy, TP: $24, +25%) Why a seemingly (quite) healthy Telco just f...
WOM Chile filed for Chapter 11 last month (April 1), followed a couple of weeks later by a local filing for WOM Colombia. Two filings in one month. Colombia’s relatively modest financing difficulties were likely sealed by the Chilean filing and we review events in Chile to work out how a seemingly successful scaled wireless operator (close to 25% market share of service revenue, 37% EBITDA margins) ended up here.
- Soomit Datta
AMX(Buy, TP: $24, +24%) Televisa (Neutral, $3.5, +11%) Megacable (Neut...
The market continued to eek out broadband growth in Q1, with Megacable leading the charge. We applaud management’s execution here and the double digit revenue and EBITDA growth, though this now seems embedded in expectations; we think it’s time to close out Megacable stock gains (30% YTD), trading on a 5.5% EFCF yield for 2025. Our target remains MXN55, though we have taken out the probability of cable-cable deal synergies, offset by upgrades following Q1s.
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