HTWS: Share Repurchases Will Drive Future Upside Despite Higher Risk Premium

Analysts have nudged our fair value estimate for Helios Towers higher to reflect a tighter analyst price target range, with upside led by Berenberg's lift to 215 GBp and offset slightly by Deutsche Bank's trim to 245 GBp, both underpinned by expectations of stronger revenue growth and resilient margins despite a modestly higher discount rate and richer future earnings multiples.

Analyst Commentary

Bullish analysts highlight that the higher price target reflects growing confidence in Helios Towers' ability to convert its tenancy pipeline into sustained revenue expansion, supporting a rerating from previously more conservative valuation levels.

They also point to the maintained Buy ratings as evidence that the current share price still embeds a meaningful execution discount, with upside driven by operating leverage and disciplined capital deployment across key African markets.

Bullish Takeaways

• Upward revisions to price targets signal increased conviction that Helios Towers can deliver higher tenancy growth and revenue visibility than previously modeled, which underpins a richer valuation framework.
• Maintained Buy stances suggest analysts see the current share price as not fully reflecting long term cash flow potential, particularly as tower utilization improves and power cost efficiencies scale.
• Stronger medium term growth expectations support the use of higher earnings and EBITDA multiples in valuation work, indicating confidence in both organic expansion and disciplined bolt on acquisitions.
• Resilient margin assumptions, despite inflationary pressures and FX volatility, reinforce the view that Helios Towers' operating model and contract structure can protect profitability through the cycle.

Bearish Takeaways

• Modest downward adjustments to some price targets show that not all analysts are willing to fully overlook execution risk, particularly around integrating new portfolios and delivering promised cost savings on schedule.
• Slightly higher discount rate assumptions indicate lingering concerns over macro and regulatory risk in certain markets, which could cap near term multiple expansion even if fundamentals improve.
• Some valuation models reflect caution on capital intensity and leverage, highlighting that higher growth expectations must be balanced against funding costs and the need to preserve balance sheet flexibility.
• Uncertainty around currency translation and tariff renegotiations is leading to more conservative long term forecasts in some cases, which tempers the pace of target price upgrades despite a broadly positive stance.

What's in the News

• Helios Investment Partners Fund II plans to fully exit its remaining 3.9% stake in Helios Towers via an accelerated bookbuild placing of approximately 41 million shares to institutional investors, with sale terms dependent on market demand and pricing conditions (Key Developments).
• Helios Towers intends to participate in the placing by repurchasing up to 10% of the placing shares under its existing buyback authority, with any acquired shares to be cancelled, which may reduce free float and support earnings per share (Key Developments).
• The company has launched a share repurchase program effective November 6, 2025. This authorizes buybacks of up to 105.27 million shares, or 10% of issued share capital, with flexibility to cancel shares or hold them in treasury until the mandate expires in 2026 (Key Developments).
• At its 2025 Capital Markets Day, management reiterated a strategy of opportunistic but disciplined M&A. The company indicated that current markets offer substantial organic growth and that Helios Towers will continue to evaluate selective inorganic opportunities that fit its return and risk criteria (Key Developments).

Valuation Changes

• The Fair Value Estimate has risen slightly from 2.03 to 2.09, reflecting a modest uplift in the intrinsic value assessment for Helios Towers.
• The Discount Rate has increased moderately from 7.91% to 8.31%, indicating a somewhat higher perceived risk profile and cost of capital in the valuation model.
• Revenue growth has edged higher from 8.02% to 8.29%, signaling a small but positive reassessment of Helios Towers' medium term top line expansion potential.
• The Net Profit Margin has dipped marginally from 14.47% to 14.42%, suggesting slightly tighter profitability assumptions despite broadly resilient margin expectations.
• The future P/E multiple has risen modestly from 23.8x to 24.8x, implying a somewhat richer valuation being applied to anticipated earnings.