TIGO: Future Will Weigh Latin America Upside Against Execution And Macro Risks

Analysts have lifted their price target on Millicom International Cellular to $63 from $55, citing continued share upside potential even after the stock's recent rally and reaffirming the company as a top pick in Latin America.

Analyst Commentary

Recent research updates highlight a constructive stance on Millicom International Cellular, with the higher price target framed around improving fundamentals and continued re-rating potential despite recent share gains.

Bullish Takeaways

• Bullish analysts argue that the raised price target better reflects Millicom's execution on operational efficiencies and strategic focus on core Latin American markets, supporting a higher earnings and cash flow outlook.
• They see further re-rating potential as the market closes the valuation gap versus regional peers, noting that the new target still implies meaningful upside from current levels even after the recent rally.
• Stronger balance sheet dynamics and ongoing deleveraging are viewed as catalysts for an improved risk profile, potentially lowering the equity risk premium embedded in the shares.
• Analysts emphasize that Millicom remains a preferred way to gain exposure to Latin American telecom growth, citing resilient demand for data and digital services that can sustain midterm revenue and EBITDA expansion.

Bearish Takeaways

• More cautious analysts highlight that recent share price strength limits near term upside, with the risk that execution missteps or slower macro growth in key markets could challenge the new valuation assumptions.
• There is concern that competitive intensity and regulatory uncertainty in some Latin American countries could pressure margins, making it harder to fully deliver on elevated earnings expectations.
• Some worry that the higher target embeds optimistic assumptions around capital allocation and network investments, which could weigh on free cash flow if returns do not materialize as projected.
• Volatility in regional currencies and political risk remain overhangs that could undermine the thesis of a smooth, sustained re-rating toward the new price objective.

Valuation Changes

• Fair Value Estimate remains unchanged at $52.35 per share, indicating no revision to the intrinsic value underpinning the higher price target.
• The discount rate is steady at 6.63 percent, reflecting an unchanged view of Millicom's risk profile and cost of capital.
• Revenue growth is effectively unchanged at about 2.81 percent, with only a negligible downward adjustment in long term growth assumptions.
• The net profit margin is stable at roughly 13.18 percent, with the updated figure differing only at the decimal precision level.
• The future P/E multiple is unchanged at about 12.43 times, suggesting that the re rating thesis rests more on execution and earnings delivery than on multiple expansion.