Berenberg slightly raises target price on Helios

9th May 2024 12:39

(Sharecast News) - Analysts at Berenberg slightly raised their target price on telecommunications tower infrastructure company Helios Towers from 170.0p to 185.0p on Thursday, stating the group was now "poised for value creation".

Berenberg stated that following a period of "significant platform expansion", it believes Helios to be set for "strong returns" on incremental invested capital in the coming years.

"Combined with its attractive end-market growth dynamics, and now demonstrable protection from currency movements and inflation, as well as the prospect that 'higher for longer' rates may now be priced in, Helios offers highly attractive reward for its risk, in our view," said Berenberg, which reiterated its 'buy' rating on the stock.

"Helios will retain its focus on organic growth and co-location lease-up to drive improvements in ROIC out to FY26 - for which it has set a target tenancy ratio of 2.2x. Given Helios's recent performance, we are confident this is achievable."

The German bank added that Helios trades on a 7.6x FY24 enterprise value/underlying earnings ratio, by its estimates.

Reporting by Iain Gilbert at Sharecast.com