America Movil Earnings: Aggressive Pricing Continues to Drive Growth

Several consistent themes were on display in America Movil's second-quarter results. The firm continues to post respectable growth. Service revenue increased 3.5%, or 4.7% excluding currency movements, in line with the average pace of the past two years. Growth has come more from customer gains than pricing discipline, which is somewhat disappointing, especially in Brazil. Revenue growth has produced operating leverage, but cash flow remains underwhelming despite lower capital spending. We still expect Movil will use its strong position across most markets to improve returns on capital over time. We're increasing our fair value estimate to $22 from $21, reflecting the time passed since our last update and accelerating share repurchases in 2024.