Auriga Starts China Mobile (CHL) at Hold, Price Target $50

January 13, 2011 7:23 AM EST
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Price: $55.99 +0.70%

Rating Summary:
    8 Buy, 6 Hold, 3 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 24 | Down: 17 | New: 14
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Auriga initiates coverage on China Mobile (NYSE: CHL) with a Hold rating and a $50 price target as the company is the leading wireless carrier in China, along with having the highest dividend yield of ~3.6% among their peers. The firm reports that their model explains how, "CHL’s EBITDA expansion has been tapering off, as new businesses such as mobile payment, mobile Internet, and Internet of Things will likely take time to become meaningful growth drivers. Our analysis indicates that investors had been willing to pay for the acceleration of CHL’s net sub add, but a re-acceleration of CHL’s net sub add is unlikely in the foreseeable future due to current market conditions." Auriga comments that if investors would like to enter China’s telecom carrier space, that they suggest looking at China Telecom (NYSE: CHA), who the firm expects will generate an attractive EBITDA expansion and a healthy FCF in the coming years.

For more ratings news on China Mobile click here and for the rating history of China Mobile click here.

Shares of China Mobile closed at $50.44 yesterday.

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