Pending March 3, the day in which Tim will present the new business plan to 2024, Equita has updated the estimates on the stock to take into account the more cautious trend in domestic business and stronger than that in Brazil.
In fact, the estimates of the Milanese SIM see a 5% reduction in Ebitda 2022 for Tim’s Italian business, also in light of the entry into the country of the Iliad fiber at aggressive prices. On the contrary, analysts raised the EBITDA 2022 on business in Brazil by 4%, thanks to the favorable exchange rate and the recent acquisition of the mobile assets of Oi, the fourth mobile operator in the South American country.
There are two paths that the company can take: accepting the takeover bid from Kkr which would like to acquire 100% of Tim, or no takeover bid and split of Tim into two parts, with the separation between the network company (Netco) and that of the commercial services (ServiceCo). However, the lowest common denominator of these two paths is the merger of the network assets with Open Fiber (OF), the company controlled by Cdp (60%) and Macquarie (40%) which has been creating a fiber optic network in the area since 2016. Italian.
The plan will focus on various issues, starting with the separation of the network (Netco) and according to analysts this operation could create value for the group. Equita highlights the breakdown of TIM’s 6 building blocks, allocated in NetCo (FiberCo, fixed domestic wholesale, Sparkle) and ServiceCo (Domestic Retail, TIM Brazil, stake in Inwit and tax asset). Equita’s analyzes lead to an overall valuation of 66 cents, broken down into 25 cents for NetCo (in a combination scenario with OF) and 41 cents for ServiceCo. Another hot topic is the hypothesis of Telecom’s sale of its stake in Inwit. This operation would allow Tim to collect around 1.4 billion euros, resources that would allow the company to reduce liabilities and manage non-deferrable investments both on 5G and on the fiber network.
While waiting to see which path the CEO Pietro Labriola will take, the Equita analysts give a Hold opinion (keep in the portfolio) and raise the target price to € 0.48 per share.
Meanwhile, in a red-tinted Piazza Affari, Telecom is currently yielding 3.03%, now finding itself at € 0.3718.