UPDATE: Stifel Nicolaus Initiates Telefonica Brasil SA with Hold on Brazilian Economic Weakness

Stifel Nicolaus initiated its coverage on Telefonica Brasil SA

with a Hold rating on concerns of economic weakness in Brazil and rising competition. Stifel Nicolaus commented, "We are initiating coverage of shares of Telefonica Brasil SA

with a HOLD rating. While we view VIV's dividend as attractive and believe that the company stands to benefit from continued growth in the Brazilian market for wireless services, we view (1) a weakening Brazilian economy, (2) rising competitive pressures in the Brazilian wireless market, and (3) the company's exposure to the slower growing fixed-line market as headwinds to the company's valuation in the medium term. As such, we view the company's shares as fairly valued at approximately 5.0x our 2013E EBITDA." Telefonica Brasil SA closed at $23.84 on Tuesday.