Swisscom AG

SCMN: XSWX (CHE)

Morningstar Rating for Stocks	Fair Value	Economic Moat	Capital Allocation
	CHF 523.00	Mbzqg	Vhvfsqlg

Relaunching Coverage of Swisscom With FVE of CHF 420; Maintaining Narrow Moat

Javier Correonero

Nov 17, 2022

We are relaunching coverage of Swisscom with a narrow moat and stable moat trend rating. Swisscom is the incumbent telecommunications operator in Switzerland, enjoying high market share in mobile (60%) and fixed-line (50%) markets. Swisscom is able to charge high prices to consumers due to its established position, a rational competitive environment, and supportive regulation. We are reducing our fair value estimate to CHF 420 per share from CHF 470 after revisiting our model assumptions, which now assume smaller EBITDA (after-leases) margin expansion. At this time shares are 15% overvalued compared with our fair value estimate.

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