reports
- 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
- 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.
- 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.
- Soomit Datta
AMX (Buy, TP: $24, +40%) AMX - Q1 24: Accelerating revenue and EBITDA...
AMX reported strong Q1 numbers after close, coming in ~2% ahead of consensus revenue and EBITDA. Growth accelerated (to 5% y/y from 3.7% in Q4) coming from Mexico and Brazil, and both fixed and wireless. Brazil EBITDA also saw strong support on the cost side. Capex was down y/y in Q1, in keeping with the FY 24 guide (~$7 billion, down from $8.8 billion in 2023); we expect mid-term capex to be provided at the upcoming May 7th Investor Day, and see potential for consensus estimates to come down he...
- Chris Hoare
Moody's assigns Baa1 rating to America Movil's proposed notes; stable ...
Moody's Ratings (Moody's) has today assigned a Baa1 rating to America Movil, S.A.B. de C.V.'s ("America Movil") proposed up to MXN20,000 million ($1.1 billion) in senior unsecured global notes due 2029. America Movil's existing ratings remain unchanged. The outlook remains stable. Proceeds will be u...
- 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
- Soomit Datta
Vivo (Buy, TP: BRL61, +15%) Vivo - Q4 23: Double digit EBITDA growth,...
Vivo reported a good set of Q4s, with a 2% EBITDA beat taking growth to 10% y/y, or 6% in real terms. Wireless service revenue growth is running ahead of peers with post-paid adds very strong; fixed has been consistently growing now at 2-3% for a few quarters. Capex came in at a shade below BRL9 billion, a level in absolute terms which think can be maintained for the coming years (and implying falling as % sales).
- Soomit Datta
- James Ratzer
- Soomit Datta
AMX (Buy, TP: $24, +40%) AMX - Solid underlying Q4s, messy Argentina ...
AMX reported solid underlying Q4s last night, coming in 1.5% ahead of expectations for revenue and in-line at EBITDA adjusting for Argentina (which booked a large negative contribution to both given 9m 23 hyperinflation adjustments). Trends are in the main unchanged: Mexican wireless OK but lacking the support from price rises – this may come after the Presidential elections and is arguably needed as a catalyst for better earnings momentum; elsewhere, a return to solid adds in Mexican broadband;...
- 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).
Moody's assigns Baa1 rating to America Movil's proposed notes; stable ...
Moody's Investors Service (Moody's) has today assigned a Baa1 rating to America Movil, S.A.B. de C.V.'s ("America Movil") proposed up to MXN20,000 million ($1.1 billion) in Senior Unsecured Global Notes due 2034. America Movil's existing ratings remain unchanged. The outlook remains stable. Proceeds...
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