On Tuesday, BofA Securities adjusted its stance on INWIT (INW:IM), the Italian wireless infrastructure company, moving its stock rating from Buy to Neutral. The revision comes with a lowered price target, now set at €10.90, a decrease from the previous figure of €11.90. BofA Securities cites a forecasted slowdown in revenue as inflationary support diminishes, prompting a need for consensus estimates to be recalibrated downward.
The firm anticipates that INWIT will reduce its financial guidance for the fiscal year 2026, with BofA Securities' own projections falling short of the company's revenue, EBITDAaL (Earnings Before Interest, Taxes, Depreciation, Amortization, and Lease expenses), and Free Cash Flow (FCF) targets by 6%, 7%, and 10%, respectively. Looking toward the fourth quarter, BofA Securities expects INWIT's EBITDA to be 2% below the consensus estimate.
The financial institution has also made adjustments to its expectations for INWIT's performance in the fiscal years 2025 and 2026. BofA Securities has trimmed its forecasts for EBITDAaL by 2.6% for FY 2025 and 2.5% for FY 2026. Similarly, estimates for recurring cash flows have been revised downward by 4.7% for FY 2025 and by 6.4% for FY 2026.
As a result of these adjustments and based on a discounted cash flow (DCF) analysis, BofA Securities has recalculated its price objective to €10.9 per share. This new target suggests a modest potential for growth from the current trading price of €10.2, leading to the decision to downgrade the stock to a Neutral rating. BofA Securities' analysis indicates a more conservative outlook for INWIT's financial trajectory as it navigates the changing economic landscape.
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