BofA double upgrades Veon, seeing potential value unlock ahead

VEON

26/08/2021 14:24

** BofA Global Research upgrades Amsterdam-listed telecom
VEON Ltd.  VON.AS ,  VEON.O  by two notches, to "buy" from
"underperform", citing "$3.2 billion balance sheet unlock
potential" mainly from tower monetisation in Russia, Pakistan,
Ukraine and Bangladesh 
    ** "Our analysis shows that tower monetization in Russia on
8-12x EBITDA could provide 20-37% value uplift or 44-84%
including all 4 countries based on multiple re-rating," BofA
says, adding tower sales give scope for a substantial hike to
shareholder remuneration
    ** BofA is also of "stronger conviction on Russian
operational recovery," citing $5.5 billion of cumulative capex
over 2019-21, of which around 55% in Russia
    ** It expects VEON's FCF to rise to $281 mln in 2022/23
driven by EBITDA increase and capex normalisation, allowing for
dividend reinstatement  
    ** "VEON is the cheapest mobile stock globally ... despite
potential catalysts" - BofA
    ** YTD, VEON's Amsterdam-listed shares are up 26.5%
    ** Out of 13 analysts, nine rate the stock "strong buy/buy"
and four "hold"

 (Reporting by Anait Miridzhanian)
 ((anait.miridzhanian@thomsonreuters.com))