Tigress Financial Partners Starts IHS Holding (IHS) at Buy, PT 100% Higher

June 10, 2022 12:48 PM EDT
Get Alerts IHS Hot Sheet
Price: $8.50 +3.91%

Rating Summary:
    10 Buy, 6 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 8 | Down: 40 | New: 22
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Tigress Financial Partners analyst Ivan Feinseth initiates coverage on IHS Holding (NYSE: IHS) with a Buy rating and a price target of $22.00.

The analyst comments "We are initiating research coverage on IHS with a Buy rating and a 12-month target price of $22 as it offers investors one of the best ways to play telecom growth in emerging markets, and the recent pullback in price is a major buying opportunity. IHS offers investors one of the best ways to play the secular growth in telecommunications in emerging markets. IHS is well-positioned to benefit from multiple trends driving growth in mobile data and communications, as ongoing subscriber growth and increased wireless and wireline connectivity will continue to drive increasing tower demand and lease growth. Wireless tower leases provide a steady revenue stream and stability in the current market environment, and IHS’s experienced management and successful track record will enable it to benefit from the ongoing secular growth in the need for a robust telecommunication infrastructure in fast-growing and currently underserved emerging markets. In the emerging markets in which it operates, IHS has a tremendous opportunity to grow its lease tendency occupancy and yields, and the more tenants a tower has, the greater cash flow and margin it creates. IHS recently reported very strong Q1 results with revenue increasing 23.4% Y/Y and 21.5% organically to $446.1 million, driven by strength across all of its regions, with Nigeria increasing 22.7% to $320.7 million, Sub-Saharan Africa revenue increasing 3.0% to $85.6 million, Latin America revenue increasing 197.4% to $31.2 million, and Middle East & Northern Africa (MENA) revenue increasing 28.1% to $8.6 million. IHS has a deeply experienced founder-led management team that has demonstrated a successful track record of growth since the company’s founding in 2001. In addition, the wireless tower industry has tremendous barriers to entry, and IHS is best positioned to benefit from its first-mover advantage position and many of its markets. IHS’s dominant position in the markets its services, along with its ability to drive both organic growth through ongoing tower buildout and additional growth through strategic acquisitions, will continue to grow its lease customer base, and its fixed-cost operating model of tower buildout creates tremendous upside opportunity for cash flow and return on capital growth as it continues to add an increasing number of tenants to its towers and ongoing technology advancements drive greater power capacity and higher yields. Ongoing global wireless telecommunication expansion combined with IHS’s disciplined and strategic capital allocation policy driving both organic and M&A-driven growth will continue to drive accelerating Business Performance Trends, growing economic cash flow, increasing return on capital, growing Economic Profit, and long-term shareholder value creation. We believe significant upside in the shares exists, and our 12-month target price of $22 represents a potential return of close to 90% from current levels."

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 $11.39 yesterday.

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