Goldman Sachs Resumes TIM S.A. (TIMB) at Neutral

Goldman Sachs analyst Gustavo Miele resumes coverage on TIM S.A. (NYSE: TIMB) with a Neutral rating and a price target of $23.40.

The analyst comments: “We resume coverage of TIMB/TIMS3 with a Neutral rating and 12-month target prices of USD 23.40/BRL 24.80, respectively. We believe that the most attractive element of TIMB's investment thesis is its compelling shareholder remuneration prospect, in light of the growth in its total shareholder return from BRL 1bn in 2021 to BRL 4.7bn in 2025. We expect this trend to continue, reaching BRL 6.6 bn in distributions by 2028E (12% yield at current prices) on the back of robust cash-flow generation trends. While we see for TIMB a more undemanding valuation vs VIVT both in terms of P/E at 12.0x 26E (vs VIV's 14.7x) and IRR, at 11.4% (vs Vivo's 9.1%), we choose not to assign a Buy rating in light of our concerns regarding the structural challenges the company faces from the convergence trend in Brazil followed by its competitors. With less than 2% of Brazil's fixed broadband subscribers, TIM can offer its Fiber+Postpaid product in far fewer locations than Vivo and Claro, which we believe that could be one of the main reasons why the company has been struggling in mobile net adds in recent quarters.”

For an analyst ratings summary and ratings history on TIM S.A. click here. For more ratings news on TIM S.A. click here.

Shares of TIM S.A. closed at $22.08 yesterday.

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