Proforma numbers for TPG Telecom were provided, which were in-line with Morgans forecasts.
The broker expects the company will generate healthy free cash flow, as management estimates total capital expenditure in the years ahead, including the 5G rollout, will be broadly similar to the last few years.
The company did not declare a dividend or provide specific guidance, other than noting Vodafone will be more impacted from a lack of international travelers in 2H20 than 1H20, which didn’t surprise the broker.
The analyst expects dividends will be paid in around 12 months.
The Add rating is maintained. The target price is decreased to $8.71 from $9.12.
Target price is $8.71.Current Price is $8.20. Difference: $0.51 – (brackets indicate current price is over target). If TPG meets the Morgans target it will return approximately 6% (excluding dividends, fees and charges – negative figures indicate an expected loss).