JPM cuts Millicom to 'neutral' as valuation post rally mirrors peers'
16/03/2023 10:36
** J.P.Morgan downgrades Millicom TIGOsdb.ST to "neutral"
from "overweight" as the recent 30% jump in the share price
implies the telecom services provider now trades in line with
its peers, while being more leveraged than the Latin American
telecom companies
** The broker notes that Millicom, whose brand Tigo offers
mobile and cable in most of Central America, Bolivia, Colombia
and Paraguay, has a debt structure that does not benefit from
tax shield, while its leverage is at 2.9x ND (Net Debt) / EBITDA
** The share rally followed the announcement in January of
potential acquisition talks with Apollo and Claure group
** The upside risk according to the broker is the offer
price - currently undisclosed - coming in above JPM's current
target price of SEK 200
** Moreover, JPM points out Tigo has a tower portfolio that
according to the broker could be worth $1.6 billion, and that it
has already separated into a new company, which could be spun
off, unlocking more value and bringing the leverage down
** The share is down 3.6% at 10:30 GMT and is amongst the
biggest fallers on the STOXX 600 .STOXX index
(Reporting by Agata Rybska)
((Agata.rybska@thomsonreuters.com))