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On Thursday, Citi analysts, led by Michael Rollins, updated their outlook on IHS Holding (NYSE: IHS), increasing the price target to $6.00 from the previous $5.00 while reiterating a Buy rating on the stock. According to InvestingPro data, the stock appears undervalued based on its Fair Value analysis, with analysts maintaining a strong consensus Buy rating. The adjustment follows the analysis of IHS's fourth-quarter 2024 performance and insights from the recent earnings call.
The company reported satisfactory normalized organic growth for the fourth quarter, with EBITDA reaching $771.56M. Additionally, IHS's guidance for 2025 appears more favorable, partly due to the impact of a weaker U.S. dollar. The company maintains strong liquidity with a current ratio of 1.33, indicating healthy short-term financial stability. Citi's analysts underscored IHS's potential to enhance shareholder value through sustained organic growth, excluding the effects of previously announced rationalization churn.
The analysts also emphasized the company's strategy of asset monetization and reducing financial leverage as key factors in supporting a higher valuation. By lowering net debt leverage, IHS could minimize risk and potentially increase value for equity holders.
In their statement, the analysts expressed confidence in the company's prospects, stating, "We believe IHS can continue to take actions to support a better value by retaining solid underlying organic growth, pursuing additional asset monetization and reducing financial leverage." The revised price target reflects these factors, including the anticipated benefits of solid organic growth and a favorable exchange rate with the Nigerian Naira.
In other recent news, IHS Holding reported impressive financial results for the fourth quarter of 2024, with earnings per share reaching $0.73, far surpassing the projected $0.01. The company's revenue also exceeded expectations, totaling $437.8 million against a forecast of $423.27 million. For the full year, IHS achieved a revenue of $1.7 billion and an adjusted EBITDA of $928 million, marking a 54.3% margin. Looking ahead, the company has set a revenue guidance of $1.68 to $1.71 billion for 2025, indicating a positive outlook.
Additionally, TD Cowen analyst Michael Elias raised the price target for IHS Holding shares from $15.00 to $16.00 and maintained a Buy rating. This adjustment follows the company's strong quarterly performance and optimistic guidance for 2025, particularly in the Nigerian market. IHS management expressed confidence in their strategic initiatives and the improving macroeconomic environment in Nigeria, supporting this favorable assessment.
Furthermore, IHS plans to continue its asset disposition strategy, targeting between $0.5 billion and $1.0 billion, which is expected to enhance its financial flexibility. The company's strategic focus on expanding its market presence, especially in Africa, has been a key driver of its robust operational capabilities and financial performance.
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