Swisscom Earnings: Outlook Indicates Little to No EBITDA Growth in 2024; Maintaining Our Fair Value

Narrow-moat Swisscom’s revenue and EBITDA slightly beat consensus expectations for 2023. Sales increased by 0.9% organically in the year, while EBITDA increased by 2.3% organically and rose 4.9% on a reported basis due to one-offs and currency effects. Management also provided its outlook for 2024 with an EBITDA (before leases) expectation of around CHF 4.5 billion to CHF 4.6 billion for 2024, compared with CHF 4.6 billion in 2023. Similar to last year, any improvement in EBITDA will mainly come from cutting costs as revenue is expected to remain flat in 2024. The firm also reiterated its dividend of CHF 22 per share. We plan to incorporate the updated outlook into our model, but do not expect to make a material revision to our fair value estimate of CHF 440. We see shares as overvalued.