Goldman Sachs Upgrades NII Holdings (NIHD) to Buy; Resumes US$ Growth

November 23, 2009 10:31 AM EST

Goldman Sachs upgrades NII Holdings (Nasdaq: NIHD) from Neutral to Buy.

Goldman analyst says, "Since reporting 3Q2009 on Oct. 22, NIHD is down 13%, vs. the S&P 500 up 3%. The quarter did show strain in Mexico, due to a harsh recession, and was not stellar in Argentina or Peru (weak macro). But Brazil, now NIHD’s biggest market, grew 40% in local currency. This carried overall revenue up 20% y-on-y in local currencies, vs. 5% for competitor América Móvil (AMX), for example. We expect a Mexico/Argentina rebound in 4Q09 and 2010. Meanwhile LatAm currencies are up 9% in 4Q09 (revenue-weighted), which should revive NIHD 4Q results to be reported in dollars."

"After shrinking in USD terms for the last three quarters, we now forecast NIHD will grow revenues 26% y-on-y this quarter, a highly visible turnaround. A large part of the move is from the recovery of LatAm currencies that had plummeted in late 2008 and early 2009. But another driver is performance in Brazil, where Nextel sales are growing very fast...Moreover, with recent technology breakthroughs, NIHD is sharing a clearer vision than before on how it plans to use 3G spectrum to offer broadband data without giving up its near-monopoly in the Latin America push-to-talk market."

To see all the upgrades/downgrades on shares of NIHD, visit our Analyst Ratings page.

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