Market Overview

Morgan Stanley Resumes VimpelCom At Overweight, Sees 'A Clearer Way To Dividends'

Share:

VimpelCom Ltd (ADR) (NASDAQ: VIP) seems to have overcome the overhangs and has “a clearer path to dividends on improving FCF and de-leveraging,” Morgan Stanley’s Polina Ugryumova said in a report. She resumed coverage of the company with an Overweight rating and a price target of $5.70.

Analyst Ugryumova believes that repricing of VimpelCom’s EU business, which currently appears undervalued, and GTH rerating could lend about 35 percent upside to the company’s share price.

Dividend Resumption

Following a three-year pause in profit distribution, VimpelCom could commence dividends in 2017, Ugryumova mentioned. Easing currency pressure and robust growth momentum in non-Russian countries should boost VimpelCom's free cash flows by 100 percent over the next couple of years, while also aiding in deleveraging the company by 2018.

“With uncertainties over the Uzbekistan investigation gone and EC approval of the JV with Hutchison's 3 Italia business, VimpelCom now looks better placed to reconsider its dividend approach,” the analyst wrote. She added that the company could adopt a "meaningful dividend policy" in 2017 and offering a ~5 percent dividend yield, comparable to its EU peers.

Ugryumova expects VimpelCom’s EPS to double in the next 2 years, backed by Op FCF improvement and deleveraging.

Do you have ideas for articles/interviews you'd like to see more of on Benzinga? Please email feedback@benzinga.com with your best article ideas. One person will be randomly selected to win a $20 Amazon gift card!

Latest Ratings for VIP

DateFirmActionFromTo
Mar 2017INGInitiates Coverage OnBuy
Feb 2017Goldman SachsReinstatesBuy
Nov 2016CitigroupUpgradesNeutralBuy

View More Analyst Ratings for VIP
View the Latest Analyst Ratings

 

Related Articles (VIP)

View Comments and Join the Discussion!

Posted-In: Morgan Stanley Polina UgryumovaAnalyst Color Long Ideas Initiation Analyst Ratings Trading Ideas

Latest Ratings

StockFirmActionPT
MRTXHC Wainwright & Co.Maintains257.0
NVDATruist SecuritiesMaintains672.0
NVDASusquehannaMaintains625.0
BLKBMO CapitalMaintains715.0
BLKDeutsche BankMaintains838.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com