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Proximus SA PROX

Morningstar Rating
€7.15 −0.22 (2.99%)
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Company Report

Trimming Proximus' FVE to EUR 10.5 Due to Continued Pressure From Fourth Operator

Proximus, the incumbent telecom operator in Belgium, shares broadband leadership with cable peer Telenet, with around 45% and 35% market share, respectively. We believe the Belgian broadband market to be a rational oligopoly where Telenet dominates in the north of the country (Flanders) and Proximus in the south (Wallonia), with the capital Brussels being a more competitive area, given its high density. Proximus has a fixed network presence across the entire country, while Telenet and Voo (another cable operator, acquired by Orange in 2022) operate only in Flanders and Wallonia, respectively.

Price vs Fair Value

PROX is trading at a 30% discount.
Price
€7.37
Fair Value
€49.90
Uncertainty
Medium
1-Star Price
€73.65
5-Star Price
€3.61
Economic Moat
Prjcr
Capital Allocation
Fgjkrtnfm

Bulls Say, Bears Say

Bulls

Proximus is the incumbent telecom operator in Belgium and the only one with nationwide fixed-line presence. Its networks and stronger brand presence should act in its favor.

Bears

Even with the reduced dividend floor of EUR 0.60 per share from 2024 onward, Proximus has very little room for organic debt repayments or incremental investments.

Is it the right time to buy, sell, or hold?
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Trading Information

Previous Close Price
€7.37
Day Range
€7.117.39
52-Week Range
€6.399.32
Bid/Ask
€7.14 / €7.24
Market Cap
€2.31 Bil
Volume/Avg
494,147 / 434,539

Key Statistics

Price/Earnings (Normalized)
7.34
Price/Sales
0.41
Dividend Yield (Trailing)
15.82%
Dividend Yield (Forward)
18.46%
Total Yield
15.82%

Company Profile

Proximus is the incumbent telecom operator in Belgium. The firm has around 45% share of the broadband market and 30% of the postpaid mobile market, mainly competing with Telenet (mobile and fixed) and Orange (mobile and fixed). Proximus is rolling out fiber to the home in Belgium and expects to have 95% of the country covered by 2032. Its international carrier services division, BICS, is one of the four largest in the world, serving more than 250 operators, which was strengthened in 2017 with the acquisition of Telesign.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Small Value
Total Number of Employees
11,654

Competitors

Valuation

Metric
PROX
KKPNY
SCMN
Price/Earnings (Normalized)
7.3417.1315.42
Price/Book Value
0.745.142.27
Price/Sales
0.412.502.39
Price/Cash Flow
1.556.286.30
Price/Earnings
PROX
KKPNY
SCMN

Financial Strength

Metric
PROX
KKPNY
SCMN
Quick Ratio
0.590.700.62
Current Ratio
0.730.750.86
Interest Coverage
5.544.9816.74
Quick Ratio
PROX
KKPNY
SCMN

Profitability

Metric
PROX
KKPNY
SCMN
Return on Assets (Normalized)
3.35%7.01%7.07%
Return on Equity (Normalized)
10.80%33.31%15.50%
Return on Invested Capital (Normalized)
6.08%10.23%14.01%
Return on Assets
PROX
KKPNY
SCMN
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