Swisscom Earnings: Stable Beginning of the Year; Guidance Unchanged

Narrow-moat Swisscom's revenue decreased by 0.3% in the first quarter, to CHF 2,747 million, with EBITDA increasing by 2.4% to CHF 1,163 million, although most of this increase was explained by an accounting reconciliation of pension costs (otherwise, EBITDA growth would have been flat). Management left its 2023 guidance of CHF 11.1 billion to CHF 11.2 billion revenue and CHF 4.6 billion to CHF 4.7 billion in EBITDA unchanged. We are maintaining our CHF 440 fair value estimate, with shares being significantly overvalued, trading in the CHF 600 range. The board intends to distribute a CHF 22 dividend per share, which has been stable now for 12 years thanks to the stability of the Swiss market and acceptable capital allocation.