We See a Disconnect Between Liberty's Share Price and Financial Fundamentals; Maintaining $32 FVE

Liberty Global's first-quarter showed sales and adjusted EBITDA stability in all markets, with both flat to slightly up in constant currencies. We maintain our USD 32 fair value estimate and believe shares offer an attractive entry point after recent share price declines. Liberty's shares have seen a progressive 15% decline during the past month, which we believe is explained by euro depreciation against the U.S. dollar and weakness in other U.S.-listed communication shares such as Verizon, Comcast or Alphabet. Despite being U.S-listed, all of Liberty’s businesses are European, having little correlation with the U.S, and we see no signs of deterioration in financial fundamentals. Liberty is just a consolidation vehicle of a list of portfolio firms, meaning each operating subsidiary manages its own cash and resources. Therefore, currency effects are caused by the translation of financial statements into U.S. dollars, but are a noncash loss.