Russia’s UralSib Capital raises targets for top telecom companies

MOSCOW, Jul 6 (PRIME) -- Investment company UralSib Capital has increased target prices of Russia’s leading telecom operators Rostelecom, MTS, MegaFon and VimpelCom Ltd., the sole owner of VimpelCom, UralSib Capital said in a research note on Wednesday.

Company, security	Closing price on Tuesday, U.S. dollars	Previous target, U.S. dollars	New target, U.S. dollars	Potential, %	Previous recommendation	New recommendation
MTS, ADRs	8.46	8.0	11.2	32	Buy	Buy
MegaFon, GDRs	10.90	11.2	12.9	18	Hold	Buy
VimpelCom Ltd., ADRs	3.95	3.2	5.3	34	Hold	Buy
Rostelecom, common	1.44	1.4	1.5	4	Hold	Hold

“Quotes of Russian operators have demonstrated high volatility recently on the news of changes in regulation, including, in particular, an obligation to store content of calls and messages, whose fulfillment could prove unaffordable for the sector. Meanwhile, we think that by the moment when the law comes in force in the middle of 2018, the requirements will be softened and transformed into a more acceptable form for the industry,” UralSib Capital said.

“We have revised our financial models of the ‘big three’ and Rostelecom in order to take into account the latest corporate changes and the current market conditions…We confirm the Buy recommendation for MTS, which offers a combination of an attractive estimate, strong operating dynamics and prospects of lavish dividends.”

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