Millicom Posts Soft Q1 Results, but Shares Remain Sharply Undervalued

Millicom reported modestly disappointing first-quarter results, with customer growth slowing. Revenue per customer also took another step lower in U.S. dollar terms, largely reflecting local-currency weakness across markets. We continue to expect financial performance will rebound as economic growth and the benefits of improved market structures in several countries have an impact. After adjusting our model to reflect weaker near-term revenue, we have lowered our fair value estimate to $51 from $55, but we still believe the stock is deeply undervalued.