- 7 Nov 2023 1:05 PM
- Hungary Around the Clock
Concorde based its recommendation on the potential increase in earnings, the discontinuation of utility taxes, and the positive shift in the government’s stance towards the sector.
Magyar Telekom’s net profit could jump from Ft 81 billion in 2023 to Ft 115 billion next year and Ft 140 billion in 2025, according to Concorde’s forecast.
Assuming a 12% inflation-adjusted price increase next year, these figures correspond to earnings per share of Ft 88, Ft 122 and Ft 153, respectively.
As the company continues to buy back its own shares, these figures could lead to dividend yields of 10.9% in 2023, 15.1% in 2024 and 19% in 2025, as management is committed to paying 60-80% of net earnings to shareholders.
Concorde adds that the forward-looking price/earnings ratio of Magyar Telekom shares is also below those of its peers in the region and the enterprise value – a financial metric used to assess the valuation of a company – is also lower than the industry average in other telecom companies in the region.
Magyar Telekom shares rose by 2.7% in Monday’s trading to Ft 605, the highest level since April 2011.