Citi has adjusted its price target for IHS Holding (IHS, Financial), increasing it from $6 to $7, while maintaining a Buy rating on the stock. This update follows the company's first-quarter results and insights shared during the earnings call. According to Citi, IHS demonstrated solid underlying normalized organic growth in the period, with financial metrics performing well due to strategic timing of interest expenses and a slower rate of decommissioning related to prior churn issues in Nigeria.
The analysis suggests that there is potential for IHS to benefit from some expansion in valuation multiples, reflecting a positive outlook for the company's future performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for IHS Holding Ltd (IHS, Financial) is $8.15 with a high estimate of $17.00 and a low estimate of $4.25. The average target implies an upside of 56.13% from the current price of $5.22. More detailed estimate data can be found on the IHS Holding Ltd (IHS) Forecast page.
Based on the consensus recommendation from 6 brokerage firms, IHS Holding Ltd's (IHS, Financial) average brokerage recommendation is currently 2.0, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for IHS Holding Ltd (IHS, Financial) in one year is $4.50, suggesting a downside of 13.79% from the current price of $5.22. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the IHS Holding Ltd (IHS) Summary page.
IHS Key Business Developments
Release Date: May 20, 2025
- Revenue Growth: 26% organic growth, driven by 8% constant currency growth.
- Adjusted EBITDA: $253 million, with a margin of 57.5%, up 1,320 basis points year over year.
- Adjusted Levered Free Cash Flow (ALFCF): $150 million, an increase of approximately 248% year over year.
- Total CapEx: $44 million, down 17.8% year over year.
- Consolidated Net Leverage Ratio: Reduced to 3.4 times from 3.7 times at the end of 2024.
- Liquidity: Over $900 million of available liquidity at the end of March 2025.
- Nigeria Revenue: $271 million, increased 19% year over year.
- Nigeria Segment Adjusted EBITDA: $179 million, a 74.1% increase year over year.
- Sub-Saharan Africa Revenue: Decreased 8.1% year over year.
- LatAm Towers and Tenants Growth: Towers grew by 6.7%, tenants by 8.2% year over year.
- Cash and Cash Equivalents: $629 million as of March 31, 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- IHS Holding Ltd (IHS, Financial) reported a strong start to 2025 with solid growth across key metrics such as revenue, adjusted EBITDA, and ALFCF, while reducing total CapEx.
- The company achieved 26% organic revenue growth, driven by increased revenues from co-location, lease amendments, new sites, and CPI escalators.
- Adjusted EBITDA reached $253 million with a margin of 57.5%, marking a significant improvement compared to the previous year.
- IHS Holding Ltd (IHS) successfully reduced its consolidated net leverage ratio to 3.4 times, down from 3.7 times at the end of 2024.
- The company announced the sale of IHS Rwanda for an enterprise value of $274.5 million, achieving a transaction multiple of 8.3 times adjusted EBITDA, which is higher than the IHS Group multiple.
Negative Points
- The company faced a decline in both towers and tenants by approximately 3% and 1% respectively, year over year, primarily due to the divestitures of towers in Kuwait and Peru.
- The impact of the renewed and extended contracts with MTN Nigeria, including associated site churn, continues to affect comparisons.
- Revenue growth was partially offset by the 14% depreciation of the Nigerian Naira against the Dollar.
- The company anticipates a step down in ALFCF in the second quarter due to the timing of interest payments and maintenance CapEx plans.
- The sale of IHS Rwanda, while beneficial, indicates a strategic shift that may reduce future growth opportunities in that market.
