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- Millicom International (NASDAQ:TIGO) shares rose 3% in premarket trading on Thursday as investment firm Piper Sandler upgraded the Luxembourg-based telecom company, citing its free cash flow prospects.
- Shares were upgraded to Overweight from Neutral as improving EBITDA, a reduction in capital expenditures and lower spectrum-related outflow should boost the company's financial position, the investment firm said.
- Millicom recently said it expects to generate $550M in equity free cash flow, resulting in roughly a 16% yield.
- Additionally, Millicom trades at the lowest multiple for Latin America telecoms, at 6.9 times operating free cash flow estimates, below the 8 multiple for Tim, 9.4 multiple for American Movil (AMX) and 9.9 multiple for Vivo.
- Lastly, a partial sale of its Lati business could cut the company's leverage and add to fair value, Piper Sandler said.
- Analysts are exceptionally bullish on Millicom (TIGO). It has a BUY rating from Seeking Alpha authors, while Wall Street analysts rate it a BUY. Conversely, Seeking Alpha's quant system, which consistently beats the market, rates TIGO a BUY.
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