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On Tuesday, Benchmark analysts increased the price target for VEON Ltd (AS:VON) (NASDAQ:VEON) shares from the previous $56.00 to a new target of $60.00, while reiterating a Buy rating on the stock. The adjustment follows VEON’s fourth-quarter earnings for 2024, which were released last Thursday, and a subsequent conference call with senior management on Friday morning. According to InvestingPro data, VEON’s stock has delivered an impressive 101% return over the past year and currently trades near its 52-week high of $48.39. The company appears undervalued based on InvestingPro’s Fair Value analysis.
VEON, known as a leading mobile operator in frontier markets, has been complemented by significant digital revenue growth in areas such as fintech, health, and entertainment applications. The company’s strategic move towards an asset-light model has been highlighted by its recent partnership with Engro in Pakistan. This follows the sale of VEON subsidiary Deodar’s tower assets for an enterprise value of $563 million, which is estimated to have a high single-digit EBITDA multiple. InvestingPro analysis reveals an impressive gross profit margin of 87.14% and strong EBITDA of $1.69 billion, supporting the company’s growth strategy. Get access to 8 more exclusive InvestingPro Tips and comprehensive financial metrics with an InvestingPro subscription.
The analyst, Matt Harrigan, noted that the increased price target reflects the company’s strong earnings report and the potential for continued growth in its various digital segments. He stated, "We are increasing our price target on BUY-rated VEON to $60 from $56 following last Thursday’s 4Q24 earnings release and a Friday morning CC with senior management." The company’s attractive valuation is reflected in its P/E ratio of 6.63, suggesting potential upside opportunity.
Harrigan also mentioned the strategic moves VEON has made, which are expected to support its growth trajectory. "VEON is a premier frontier markets mobile play complemented by breakout digital revenue growth for fintech, health, and entertainment apps," he said, emphasizing the significance of the company’s transition to an asset-light model and the recent sale of its tower assets.
The analyst concluded that any revisions to VEON’s financial model for the final 2024 figures should be minimal, indicating confidence in the company’s reported earnings and future prospects. VEON’s stock price target increase by Benchmark reflects optimism about the company’s strategy and performance in the digital and mobile sectors.
In other recent news, VEON Ltd. reported a strong financial performance for the fourth quarter of 2024, with total revenue reaching $4 billion, an increase of 8.3% from the previous year. The company’s digital revenue surged by 63%, contributing significantly to its overall growth, and EBITDA rose by 4.9% to $1.7 billion. VEON also announced a second phase of a $35 million share buyback, further indicating its strategic focus on enhancing shareholder value. In a separate development, VEON has partnered with Airspan Networks to enhance Ukraine’s telecommunications infrastructure, committing to a $1 billion investment in rebuilding Ukraine’s digital framework from 2023 to 2027.
The collaboration aims to improve communication resilience in extreme conditions, leveraging Airspan’s expertise in Open RAN technology. Moreover, VEON successfully exited the Russian market and relocated its headquarters to Dubai, aligning with its strategic market exits and digital expansion efforts. The company plans to list its Ukrainian subsidiary, Kyivstar, on NASDAQ, which is expected to enhance its visibility and profile. These recent developments reflect VEON’s strategic initiatives and robust financial results, positioning the company for continued growth despite potential challenges in its operating environment.
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