CaixaBank/BPI raises NOS recommendation
CaixaBank/BPI has raised its target value for Portuguese telecommunications company NOS shares from €3.80 to €4.00 per share. It recommends that the shares should now be rated ‘neutral’ after they were rated ‘underperforming’.
The bank’s analysts have also awarded NOS with an ‘average risk’ rating in terms of ESG Risk Exposure.
CaixaBank/BPI begins by stating that whilst NOS has entered new markets which are, it considers, “A risk” such as Nowo or Digi, after having purchased 5G licenses in the Anacom 5G auction in 2022, in truth these licences are late in being issued, which has enabled NOS to post solid results.”
“After taking part in the spectrum auction in October 2021, little has been mentioned about Nowo and Digi. Meanwhile, Nowo has been losing market share, while the MásMóvil joint-venture in Spain has upped the probability of it being integrated with another player, reducing the possible new participants to one. Having expected its launch in mid-2022, it is now expected to be in 2023”, say the bank’s analysts.
The investment bank argues “the sale of a share in its network could be a catalyser in the medium term” for NOS.
NOS has enjoyed solid results. In recent quarters the telecoms operator as enjoyed increased revenues at a rate of between 1.5% and 2.5% YoY per quarter, with stable EBITDA margins.
The recovery of its Audiovisual and Cinema segment to pre-pandemic levels also provided modest additional gains.
The analysts say that after rumours in the market; “We believe that the company is finally seriously thinking about selling a 49.99% share in its Fibre-to-the-Home network, which would bag the company €900 million and completely wipe out its debt and increase the value of its shares to €4.4 per share”.