Communications
With good ARPU support from post-paid 5G, and in launch phase for pre-paid, New Street are lifting their mid-term estimates for Mexican wireless (worth $2.5/ADR); they think this business, with a globally unique market structure, merits a 9x 24E EBITDA multiple. They have also nudged up regional fixed operations following raised FTTH efforts (<$1). AMX’s competitive position is reinforced by its rock-solid balance sheet (in a region where there is significant balance sheet stress) and which allows for a rising cash return from what is expected to be the 1Q23 buyback trough. Recent MXN and BRL strength have also been supportive, adding another ~$2 per share to their TP of $27.
Edition: 161
- 26 May, 2023