Nothing New in Proximus 4Q Results; We Believe Shares Are Cheap, Offering 50% Upside

There were no new developments in narrow-moat Proximus' fourth-quarter results, as the company already held its capital markets day one month ago. Revenue grew by 8.4% in the fourth quarter mainly because of BICS and Telesign divisions, which grew 20.4% and 60.5%, respectively. The core Belgian telecom business grew by 2.1%, and group EBITDA was 1.4% higher. Management met its outlook for full-year 2022 and has guided for a revenue increase of 1% to 3% in the core telecom business in 2023 and an EBITDA decline of 3% caused by the inflationary effects on wages. Although we recently reduced our fair value estimate to EUR 14.00 from EUR 18.00 per share, we believe Proximus shares have been overly punished and offer a 50% upside. As of today, Proximus shares are trading at a 3.5 times enterprise value to EBITDA multiple, lower than other European telecoms with exposure to more competitive and pressured markets.