Last Update 05 Dec 25

Fair value Increased 2.54%

MTN: Future Multiple Expansion Will Offset Margin And Leadership Execution Risks

Analysts have nudged their fair value estimate for MTN Group higher to approximately $176.89 from $172.50, citing a higher future P/E multiple despite slightly softer revenue growth assumptions and a notably lower projected profit margin.

Analyst Commentary

Recent Street research around Vail Resorts, which shares the MTN ticker in the U.S., offers a mixed backdrop that indirectly informs sentiment toward MTN Group. While the businesses are fundamentally different, the updates highlight how markets are currently rewarding clear execution, visibility on medium term earnings, and credible turnaround plans, and penalizing uncertainty around demand trends and profitability.

For MTN Group, these themes translate into a sharper focus on how convincingly management can articulate its margin path, balance growth investment with returns, and navigate cyclical or regulatory headwinds across its footprint. The modest uplift in fair value despite softer margin assumptions indicates that valuation support is increasingly driven by longer term multiple expansion rather than near term earnings momentum.

Street commentary can broadly be grouped into the following perspectives, which map to how investors may frame MTN Group’s risk reward profile:

Bullish Takeaways

Bullish analysts see scope for multiple expansion when companies demonstrate durable subscription like revenues and high visibility over future cash flows, a framework that can support MTN Group’s valuation if it continues to grow its data and fintech ecosystems.
Where management teams acknowledge operational shortfalls early and outline multi year improvement plans, markets tend to give some credit for self help, suggesting MTN Group could unlock upside by clearly staging its margin recovery and capital allocation priorities.
Analysts are generally willing to look through weaker non core quarters when the core earnings engine remains intact, which may help support MTN Group’s valuation through temporary macro or FX related volatility.
Evidence of improving engagement and monetization in key products is often viewed as an early indicator of operating leverage, hinting at potential upside to MTN Group’s medium term earnings power if user monetization trends strengthen.

Bearish Takeaways

Bearish analysts highlight that even modest deceleration in recurring revenue metrics can quickly compress valuation multiples, underscoring the importance for MTN Group of sustaining momentum in subscriber growth and ARPU.
Conservative medium term EBITDA outlooks are being met with lower price targets, signaling that MTN Group could face downside risk to its fair value if margin recovery lags guidance or falls short of market expectations.
Leadership transitions and perceived execution risk in mature markets are drawing scrutiny, implying that any senior management changes or strategy shifts at MTN Group will be closely examined for potential disruption to its growth trajectory.
Analysts remain wary when turnaround plans appear incomplete or back end loaded, suggesting that if MTN Group’s strategic initiatives are not matched with timely, measurable milestones, investors may be reluctant to assign a premium multiple.

What's in the News

CEO Ralph Mupita has dismissed renewed market speculation that MTN Group is in fresh takeover talks to acquire Telkom SA, stating there are no active discussions or advisers mandated on a Telkom transaction. (Key Developments)
Mupita reiterated that MTN sees building its own fibre network in South Africa as an unviable use of capital, arguing the country already has sufficient fibre infrastructure in place. (Key Developments)
MTN continues to view partnerships or acquisitions as the only realistic routes to scale in home and fixed internet, reinforcing strategic interest in fibre assets even as formal deal talks with Telkom are off the table. (Key Developments)
The company previously withdrew an estimated ZAR 30 billion bid for Telkom in 2022 after rival Rain made its own merger approach, with MTN’s interest understood to have focused on Telkom’s fibre business housed in Openserve. (Key Developments)

Valuation Changes

The Fair Value Estimate has risen slightly to approximately $176.89 from $172.50. This reflects modest upside despite softer operating assumptions.
The Discount Rate is unchanged at 16.73 percent, indicating no revised view on MTN Group’s risk profile or cost of capital.
Revenue Growth has edged down marginally, with the medium-term annual growth assumption reduced from about 13.02 percent to 12.96 percent.
The Net Profit Margin has fallen significantly, with the long-run margin assumption reduced from roughly 19.63 percent to 16.69 percent.
The future P/E multiple has increased meaningfully from around 8.9x to 10.8x, suggesting a greater share of fair value now comes from anticipated multiple expansion.

Rapid subscriber and mobile money adoption, along with network expansion, is enhancing customer retention and diversifying growth beyond traditional voice services.
Strategic capital allocation, operational efficiency, and improved market conditions are strengthening profitability, cash flow, and shareholder value potential.
Intensifying competition, regulatory risks, industry commoditization, high CapEx, and macroeconomic volatility collectively threaten MTN's revenue growth, margins, cash flow, and overall profitability.

Catalysts

About MTN Group

Provides mobile telecommunications services in South Africa, Nigeria, South and East Africa, West and Central Africa, and the Middle East and North Africa.What are the underlying business or industry changes driving this perspective?

MTN is experiencing significant subscriber and data usage growth across Africa, underpinned by favorable population dynamics, accelerating digital adoption, and rapidly rising smartphone/data penetration. This is expected to sustain double-digit top-line (revenue) growth as more customers utilize higher-value data and digital services.
Expanding adoption of MTN's fintech and mobile money ("MoMo") platforms, including advanced services such as payments, remittances, and digital banking, is driving non-voice revenue growth, enhancing net margins, and creating long-term customer stickiness.
The company is executing disciplined capital allocation, including strategic front-loading of CapEx in key growth markets like Nigeria and ongoing focus on expense efficiency programs. These initiatives support infrastructure quality and operational leverage, which should benefit margins and free cash flow as investment moderates in future periods.
Ongoing 4G/5G network rollout, selective expansion of fiber and fixed wireless access, and strategic partnerships (including collaboration with non-terrestrial networks) position MTN to capture emerging opportunities in the growing African digital ecosystem, supporting sustainable revenue and earnings growth.
MTN's improved macro, regulatory, and FX landscape in core markets (notably Nigeria and Ghana), combined with a stronger balance sheet, rising cash upstreaming, and potential for increased dividends or future share buybacks, provide further upside to medium-term earnings and shareholder returns.

MTN Group Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming MTN Group's revenue will grow by 10.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.6% today to 14.7% in 3 years time.
Analysts expect earnings to reach ZAR 41.5 billion (and earnings per share of ZAR 20.87) by about September 2028, up from ZAR 7.5 billion today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 12.2x on those 2028 earnings, down from 33.9x today. This future PE is lower than the current PE for the ZA Wireless Telecom industry at 24.9x.
Analysts expect the number of shares outstanding to grow by 1.32% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 16.74%, as per the Simply Wall St company report.

MTN Group Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

Heightened competitive intensity in South Africa, especially in the prepaid segment, is leading to lower market share and margin pressure, which may require ongoing cost absorption to maintain competitiveness, directly impacting revenue growth and net margins.
Persistent regulatory, legal, and compliance risks-including ongoing legal cases (ATA, Turkcell, DOJ investigation), evolving digital taxation regimes, and complex SIM registration mandates-expose MTN to significant one-off or recurring costs and operational disruptions, which may constrain earnings and profitability over time.
The commoditization of core connectivity services and industry price competition, particularly from MVNOs and OTT services, risks sustained downward pressure on ARPU and top-line growth if MTN is unable to fully offset these trends with data and fintech offerings, potentially eroding group revenues.
High capital intensity and accelerating CapEx, especially in major markets like Nigeria (and selective 5G/FWA/FTTH rollouts), could lead to increased debt and capital allocation challenges, compressing free cash flow and potentially limiting dividend growth or share buybacks.
Exposure to macroeconomic and foreign exchange volatility in key markets (notably Nigeria and Ghana) remains a long-term risk; while recent stability provided tailwinds, any renewed volatility or inability to repatriate cash due to local currency controls or capital restrictions could materially impact consolidated earnings and liquidity.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of ZAR167.111 for MTN Group based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of ZAR230.0, and the most bearish reporting a price target of just ZAR73.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be ZAR281.8 billion, earnings will come to ZAR41.5 billion, and it would be trading on a PE ratio of 12.2x, assuming you use a discount rate of 16.7%.
Given the current share price of ZAR139.8, the analyst price target of ZAR167.11 is 16.3% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

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