reports
- Soomit Datta
- Soomit Datta
TV US (Neutral, TP: $3.5,) Televisa Q2 24 - Cost (and maybe capex?) t...
Televisa reported Q2’s after close. Trends were broadly as expected, with focus on FCF rather than growing the base, meaning revenue momentum slipped further (-6% y/y from -5% in Q1) on the back of limited broadband adds (in contrast to peers like AMX) as well as a video subs disconnection. Operating segment income improved a touch (still down 8% y/y) and with the prospect of DTH/cable synergies coming through from Q3.
- 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
Mexican Cable/FTTH – Capex down, promotions lifting; Buy MEGA; TV/TPLA...
Following TotalPlay and Televisa results at the end of last week, and Megacable the week prior, we highlight key positive conclusions from the Mexican reporting season: 1/ Capex is coming down across the board in Mexico in FY 24 driving an uplift in OpFCF margin for all players, 2/ Lower promotional intensity through YE is helping ARPUs and would be supportive if it holds.
- Soomit Datta
MEGA (Buy, TP: MXN55, +20%) Megacable Q4s - The big capex unwind star...
Megacable reported good Q4s last night with strong broadband adds, revenue growth accelerating (to 14% y/y on core cable/FTTH) and perhaps most supportively EBITDA on core returning to 12% growth on new build operational leverage; EBITDA was flat only a couple of quarters go and the guide is for margin expansion in FY 24 and beyond (ahead of us and the market).
- Soomit Datta
TV (Neutral, TP: $3.7, +17%) Televisa – Spin Co support for M&A; TVUN...
Ahead of the spin of its non-core assets next week (Feb 20th) we highlight the impact to Televisa: potentially an ex-div move of up to $0.5 per ADR (assuming SpinCo trades at 4x EBITDA, in-line with our implied valuation). Cleaning up the business would be a helpful move ahead of potential M&A (with Megacable). We also run through TVUNI (>100% of target TV equity) Q4 results yesterday, feeling the headwinds of a tough comp in the 2022 World Cup, but with a better outlook for 2024 where we think...
- Soomit Datta
MEGA (Buy, TP: MXN55, +20%) Megacable - falling Capex outlook driving...
We provide a quick outlook (via a key chart) on the slowing FTTH roll in 2024/25 and how we think this plays into capex, supported also by current stronger peso/$, which we see declining from 2024 helping transform FCF prospects. We also preview numbers ahead of Q4: the last quarter of big capex spend we think, with strong operational momentum anticipated, with some seasonality to EBITDA margin.
- 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
MEGA (Buy, TP: MXN55, +25%) TV (Neutral, TP: $3.7, +12%) Mexico M&A -...
One year on and speculation as to a merger between Megacable and Televisa (Izzy Cable) is back, as evidenced by the past few days’ share price rally. Over the last year, Izzy has struggled operationally as Megacable has rapidly overlaid Izzy homes. We re-run a merger analysis reflecting the balance of power swing toward Megacable and the likelihood it rather than Televisa take control of the Cable NewCo.
- David Lopes
- Soomit Datta
AMX (Buy, TP: $24, +43%) MEGA (Neutral, TP: MXN43, +21%) TV (Neutral, ...
We round up on Mexican fixed results from the last 24 hours. Trends continue to show Megacable and Totalplay as share gainers, with Izzy (Televisa) significant share losers, exacerbated this quarter by a large subs write offs. AMX is adding subs, though at a lower rate.
- Soomit Datta
Mexican Cable/FTTH: Q3 outlook – Avoid the direct plays, but AMX looks...
We’re expecting Mexican fixed Q3 to be something of a replay of Q2 in terms of competitive dynamics/subscriber share: share gainers Megacable (Neutral) and Totalplay doing so at the expense of FCF (TPLAY 2025’s now yielding 26%), whilst Televisa (Neutral) continues to lose ground, compounded by write-offs and what looks to be a more cautious approach to client adds.
- Soomit Datta
AMX (Buy, TP $27, +29%) MEGA (Neutral, TP: MXN43, +2%) TV (Neutral, TP...
Megacable reported Q2s after close, a few hours after TotalPlay (under our HY coverage) also reported. We now have a complete picture of the Mexican fixed market for Q2. MEGA posted strong RGU net adds (again), helped by the acceleration in its network deployment, and saw its mass market revenue growth accelerate to 10% y/y from 8% in Q1.
- Soomit Datta
TV US (Neutral, TP: $5.00, +8%) Televisa Q2s - Tough cable, TVUNI top...
Televisa reported Q2s after close last night, which followed TelevisaUnivision’s report at the end of last week. For the consolidated businesses of cable and SKY we had flagged anticipated weak numbers (see HERE) which largely played out. Cable RGU adds were very weak this quarter under pressure from Megacable’s expansion efforts, as well as following the lapsing of promotions end-2022 and more recent price increases
- Soomit Datta
MEGA (Neutral, TP: MXN43, +4%) TV (Neutral, TP: $5.0, +2%) Mexican C...
Following our HY initiation on Totalplay (see High Yield – LatAm Telcos Coverage) we review our forecasts for Megacable and Televisa ahead of Q2 results. We see tough trends for Televisa, largely the flip side of ongoing decent momentum for Megacable in its new regions (Izzy’s territories). We are also formally (and a touch belatedly) removing M&A optionality from our targets for both stocks: moving to MXN43 (from MXN65) for Megacable and to $5.0 (from $7.0) for Televisa.
- Soomit Datta
- David Lopes
- Soomit Datta
TV US (Neutral, TP: $7, +50%) Q1 23 Quick Take: Revs/EBITDA miss; Inf...
Televisa reported Q1s after close last night, which followed TelevisaUnivision’s report earlier in the day. Consolidated revenue and EBITDA came in below expectations (2-3%), with some improvements in MSO cable revenue (+4% y/y from 1% in Q4), offset by Enterprise Cable and ongoing weakness at SKY.
- Soomit Datta
LatAm Telcos - Q4 Datafile and Review: Brazil wireless strength; cuts ...
We accompany our updated 2022 LatAm Telcos datafile with a handful of key slides highlighting: 1/ Brazil and Mexico holding up well in wireless (the smaller markets much less so), 2/ With the exception of Brazil we see pressure on fixed BB pricing across the region (and cut underlying Mexican cable valuations again), 3/ With more regulator disclosure we focus on Colombia, where competitive pressures are accelerating (relevant for AMX and Millicom).
- Soomit Datta
MEGACPO (Buy, TP: MXN75, +50%) TV US (Buy, TP: USD8.5, 65%) LatAm M&A...
The LatAm region has burst into M&A life in the last 12 months. However, it’s been a challenge for public investors to make money on this theme. Whilst we see plenty of accretion from 4-3 consolidation in Brazil (Apr-22 close), shareholders in TIM (most exposed) haven’t yet been rewarded. Millicom is in play but unless you were super nimble on entry it’s unlikely you’re sitting on material gains (given preceding heavy stock weakness).
- David Lopes
- Soomit Datta
TV US (Buy, TP: $8.5, +48%) MEGACPO (Buy, TP: MXN75, +42%) Mexican c...
Megacable and Televisa reported Q4s after close with numbers reflecting the competitive nature of the Mexican fixed market. Having steered the market down, Televisa hit estimates though residential cable (Izzy) revenue is just +1% y/y as better RGUs are coming with significant ARPU dilution (-7% y/y) as promotions proliferate. MEGA is fairing better at revenue, with good RGUs in new areas and 7% y/y cable revenue growth helped in turn by price increases (Izzy didn’t increase), though margins wer...
- David Lopes
- Soomit Datta
MEGA (Buy, TP: MXN75, +30%) AMX (Neutral, TP: USD22, +9%) TV (Buy, TP:...
We think Televisa is very likely to come back and sweeten the Nov 14th offer for Megacable. And soon. Even on currently proposed terms, should the deal progress we would see 50% upside for MEGA from here, whilst improved terms could push value toward the MXN100/share level for today's shareholders.
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