[Deutsche Banc starts Iusacell at Market Perform]
Friday March 23, 12:01 pm Eastern Time
RESEARCH ALERT-Deutsche Banc starts Iusacell
MEXICO CITY, March 23 (Reuters) - Deutsche Banc Alex. Brown
financial analyst Ronald Aitken said on Friday he was
initiating coverage of No. 2 Mexican wireless
telecommunications company Grupo Iusacell (NYSE:CEL - news)
with a market perform rating.
In a report, Aitken said:
-- Our cautious stance on the stock primarily reflects our
expectations of continued negative market sentiment toward
the sector, intensifying competitive forces in the Mexican
wireless market and unattractive valuation comparisons.
-- Despite the company's slower growth, contract customer-
focused strategy, Iusacell's profitability level has not
outperformed the sector average.
-- Iusacell's valuation multiples are also not compelling, in
our view. Based on our new 2001 estimates, the stock
trades at an enterprise value/EBITDA (earnings before
interest, taxes, depreciation and amortization) multiple
of 11.2 times and $1,012 per subscriber. This compares
with the Latin American and Asian averages of 8.8 times
and $697 and 8.8 times and $1,461, respectively. |
