UPDATE: JPMorgan Starts IHS Holding (IHS) at Neutral

JPMorgan analyst Philip Cusick initiates coverage on IHS Holding (NYSE: IHS) with a Neutral rating and a price target of $20.00.

The analyst comments "We like IHS’s solid secular tower growth in emerging markets as well as the tower business model, but we remain wary given international risks and Nigeria concentration. While the 27% upside to our price target is substantial, we place a higher than normal bar on this one due to the company’s 86% EBITDA (2021E) exposure to Nigeria as well as exposure to rising oil prices. Organic growth should remain strong, but the really exciting compelling opportunity about IHS is the potential roll-up opportunity in more EM markets; the company has substantial balance sheet capacity, but using equity for acquisitions could be a challenge with shares trading at 7.2x 2022 EBITDA (IFRS) vs peers much higher, and trying to buy emerging market infrastructure assets, which that often trade in the mid-teens. Shares may take time to find a home, as US investors generally focus on developed markets and international investors are biased to local listings. IHS is also unlikely to pay a dividend – we agree that this is the right strategy but it will keep some investors away as well."

For an analyst ratings summary and ratings history on IHS Holding click here. For more ratings news on IHS Holding click here.

Shares of IHS Holding closed at $16.32 yesterday.

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