Analyst Note| Michael Hodel, CFA |
Telefonica Brasil’s (Vivo) revenue growth continued to trail its major Brazilian wireless rivals during the second quarter as its premium market position erodes. We expect the firm will post improving results in the coming quarters as its customer mix increasingly resembles other carriers’ and recent pricing increases take hold. On the fixed-line side of the business, Vivo continues to aggressively migrate its customer base to its fiber network, helping stabilize revenue. Our $11 fair value estimate is unchanged and we believe the ADRs are attractive.