Deutsche Bank Upgrades VimpelCom (VIP) to Buy; Recent Development Positive For All Shareholders

October 6, 2009 10:34 AM EDT

Deutsche Bank upgrades VimpelCom (NYSE: VIP) to Buy. Price target increased to $23.10.

Deutsche analyst says, "In a development that we see as positive for all shareholders, VimpelCom's main shareholders Altimo and Telenor agreed to combine their assets in VimpelCom and Kyivstar into a newly created company. The proposed deal should put an end to the long-standing conflict between them. As a result, we reduce our risk premium, reflecting improvement in corporate governance. We also revise our model to include our rough estimates for Kyivstar's financials from mid-2010."

"Although we will need more details on Kyivstar’s financials and further tweaks to our model are possible, we revised our estimates for VimpelCom’s Ukrainian operations to include our estimates for Kyivstar. As a result, we raise our consolidated revenues for 2010F by 6% and our 2011F revenue estimates by 11%...As a result, we raise our net income estimates by 25-26% in 2010-11F."

To see more analyst ratings on VIP Click Here.

Open Joint Stock Company Vimpel-Communications, a telecommunications operator, provides voice and data services through various mobile, fixed, and broadband technologies in the Russian Federation, the Commonwealth of Independent States, Vietnam, and Cambodia.

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