Millicom International Cellular SA (TIGO) PT Raised to $46.10 at Scotiabank

Scotiabank analyst Andres Coello raised the price target on Millicom International Cellular SA (NASDAQ: TIGO) to $46.10 (from $37.00) while maintaining a Sector Perform rating.

The analyst commented: "It’s a bull market and investors are less open to hear about challenges than opportunities. Supposing Colombia’s government doesn’t get greedy and demands a higher bid from TIGO, the company should see a 74% increase in net debt from four major acquisitions (UNE-EPM, Coltel, TEF Ecuador and TEF Uruguay). Provisions were made such that if the acquisition of the 50% stake held by UNE-EPM in TIGO Colombia fails to materialize, the merger with Coltel can still go through, except that all future synergies would have to be shared with Medellin’s municipality. Offsetting the heavy interest burden from these acquisitions will require TIGO to deliver, almost immediately, an impressive turnaround strategy in countries where TEF leaves behind operations with sub-optimal scale. By skipping the 5G auction in Paraguay and underinvesting in Nicaragua, TIGO has opened the door to new entrants; ironically, EBITDA from these two markets is similar to what we expect from ColTel in 2026 (~US$400M). We expect the US$100M EFCF contribution from the newly acquired operations to be partly offset by a US$75M spectrum provision in Ecuador. We project US$854M in EFCF for 2026 for an 11.4% yield; US$46.1/ADR target, Neutral."

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