(Finance) – EnVent Italia SIM has confirmed the recommendation (Outperform) and the target price (6.6 euros per share, upside of 78%) on the stock Unifiedtelecommunications, Cloud and IoT services operator listed on Euronext STAR Milan.
Following the just announced acquisition by Verizonthe third largest broadband provider in the US, Frontiernumber 6 in the same ranking and one of the largest owners of optical fiber, the analysts analyzed the value and performance of the fiber infrastructure market. The main findings for the 4 largest listed are: competition from huge financial debt, higher than revenues and 4 to 6 times EBITDA (versus 1.5 times for Unidata); % EBITDA in the region of 30 and EBIT in 20. According to McKinsey, P/E multiples of fiber infrastructure deals have gone beyond 20x, up to 30x, while traffic is now expected to grow at 20% CAGR. The average EV/revenue is in the range of 2/3x (higher for wholesale players). In this context, “we see a promising period for Unidataas soon as the Fiber Joint Ventures are fully operational”, the research reads.
“We appreciate Unidata’s performance in terms of continuity and organic growth during the integration of TWT and consider the first half figures to be overall consistent with our assumptions for fiscal year 2024, counting on an even stronger second half as in 2023,” EnVent writes. “We remain confident with our latest estimates and valuations, while the share price is currently trading at a significant discount to peers“.