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Millicom International Cellular S.A. (NASDAQ:TIGO) Just Reported First-Quarter Earnings: Have Analysts Changed Their Mind On The Stock?

It's been a mediocre week for Millicom International Cellular S.A. (NASDAQ:TIGO) shareholders, with the stock dropping 10% to US$17.91 in the week since its latest first-quarter results. It was an okay result overall, with revenues coming in at US$1.4b, roughly what the analysts had been expecting. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. So we collected the latest post-earnings statutory consensus estimates to see what could be in store for next year.

View our latest analysis for Millicom International Cellular

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Taking into account the latest results, the most recent consensus for Millicom International Cellular from nine analysts is for revenues of US$5.70b in 2023 which, if met, would be a satisfactory 2.0% increase on its sales over the past 12 months. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.69b and earnings per share (EPS) of US$1.20 in 2023. Overall, while the analysts have reconfirmed their revenue estimates, the consensus now no longer provides an EPS estimate, suggesting that the market believes revenue is more important after these latest results.

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We'd also point out that thatthe analysts have made no major changes to their price target of US$22.82. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Millicom International Cellular analyst has a price target of US$30.00 per share, while the most pessimistic values it at US$19.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Millicom International Cellular's past performance and to peers in the same industry. It's pretty clear that there is an expectation that Millicom International Cellular's revenue growth will slow down substantially, with revenues to the end of 2023 expected to display 2.7% growth on an annualised basis. This is compared to a historical growth rate of 7.0% over the past five years. By way of comparison, the other companies in this industry with analyst coverage are forecast to grow their revenue at 4.0% per year. Factoring in the forecast slowdown in growth, it seems obvious that Millicom International Cellular is also expected to grow slower than other industry participants.

The Bottom Line

The clear take away from these updates is that the analysts made no change to their revenue estimates for next year, with the business apparently performing in line with their models. On the plus side, there were no major changes to revenue estimates; although forecasts imply revenues will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

We have estimates for Millicom International Cellular from its nine analysts out to 2025, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 3 warning signs for Millicom International Cellular (2 are potentially serious!) that you should be aware of.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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