On Wednesday, Citi maintained its Buy rating on IHS Holding (NYSE:IHS) but reduced the stock's price target to $3.70 from $8.00.
The adjustment reflects the firm's updated model for IHS Holding, taking into account the recent devaluation of the Naira. Citi's analysis indicates that despite the financial challenges anticipated for 2025, which include a potential churn risk of up to 2,500 leases, IHS Holding's shares are still trading at a low asset valuation, approximately 4.7 times the estimated 2024 EBITDAaL (Earnings Before Interest, Taxes, Depreciation, Amortization, and Leasing costs).
"We believe management needs to more urgently respond to the headwinds on valuation with a defined plan for value creation," said Citi.
The firm suggested that IHS Holding could explore various strategies such as asset monetization or recycling, reducing net debt leverage, or even considering going private. Additionally, improving relations with its largest owner and customer could enhance visibility into the company's future financial performance.
The firm's stance remains positive on the stock due to the belief in its long-term potential to enhance its public market value.
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