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Benchmark cuts Liberty Global shares target, bullish on strategic value unlock

EditorEmilio Ghigini
Published 05/08/2024, 08:02 AM

On Wednesday, Benchmark has revised its price target for Liberty Global (NASDAQ:LBTYA) shares, reducing it to $30.00 from the previously set $34.00, while still recommending the stock as a Buy. The adjustment comes amid the company's strategic efforts to enhance shareholder value and drive organic growth.

The analyst from Benchmark highlighted the potential upside from management's initiatives to unlock value in the equity markets. This includes the anticipated spinoff of Swiss Sunrise, which is expected in the fourth quarter of 2024.

The spinoff is seen as part of a broader strategy to offer pure individual European market plays, aligning with the company's narrative of transformation and growth.

Liberty Global is actively investing in Fiber-to-the-Home (FTTH) and 5G upgrades across several European markets, including the U.K., Belgium, and Ireland. Despite these investments, the company remains a leader in fixed-mobile convergence both in Europe and globally.

The report also notes that any further spin-off or flotation actions, particularly for operations in the U.K. (VMO2) and the Netherlands (VodafoneZiggo), will depend on the progress of deleveraging and the momentum of the organic business. The analyst's report provides detailed gross asset values for these markets.

The company's strategic moves, such as the Swiss Sunrise spinoff, are part of Liberty Global's larger plan to optimize its market presence and improve growth prospects across its European operations.

InvestingPro Insights

In line with Liberty Global's strategic maneuvers to enhance shareholder value, InvestingPro data reveals that the company is trading at a low Price / Book multiple of 0.35 as of Q1 2024. This could indicate a potentially undervalued stock, aligning with Benchmark's revised but still optimistic price target. With a market capitalization of $6.42 billion and a notable gross profit margin of 67.15% over the last twelve months as of Q1 2024, Liberty Global's financial health appears robust despite the company not being profitable during this period.

InvestingPro Tips further enrich the narrative by highlighting the aggressive share buyback strategy pursued by management and a high shareholder yield, which could be attractive to investors seeking companies with proactive capital return policies. On the flip side, analysts do not expect the company to be profitable this year, and the absence of dividend payments may deter income-focused investors. With these insights, readers can better gauge the mixed yet intriguing investment landscape that Liberty Global presents.

For those interested in a deeper dive into Liberty Global's financials and future outlook, InvestingPro offers additional tips and metrics. Use coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription, and explore the 6 additional tips listed on InvestingPro to make more informed investment decisions.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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