Potential Upside For MTN Group Limited (JSE:MTN) Not Without Risk
Apr 27
South African (JSE) Telecom Sector Analysis
UpdatedMay 08, 2024
DataAggregated Company Financials
Companies10
- 7D2.8%
- 3M-1.7%
- 1Y-21.4%
- YTD-15.5%
Over the last 7 days, the Telecom industry has risen 2.8%, driven by gains from MTN Group of 3.5%. In contrast, the industry has lost 21% in the last 12 months. Looking forward, earnings are forecast to grow by 28% annually.
Sector Valuation and Performance
Has the South African Telecom Sector valuation changed over the past few years?
| Date | Market Cap | Revenue | Earnings | PE | Absolute PE | PS |
|---|---|---|---|---|---|---|
| Wed, 08 May 2024 | R370.5b | R430.2b | R13.5b | 10.3x | 27.4x | 0.9x |
| Fri, 05 Apr 2024 | R394.3b | R430.2b | R13.5b | 10.9x | 29.1x | 0.9x |
| Sun, 03 Mar 2024 | R357.1b | R431.9b | R30.1b | 7.4x | 11.9x | 0.8x |
| Tue, 30 Jan 2024 | R390.5b | R434.1b | R29.6b | 9.7x | 13.2x | 0.9x |
| Thu, 28 Dec 2023 | R439.6b | R434.1b | R29.6b | 10.1x | 14.8x | 1x |
| Sat, 25 Nov 2023 | R414.2b | R434.1b | R29.7b | 9x | 14x | 1x |
| Mon, 23 Oct 2023 | R439.1b | R473.6b | R25.2b | 9.2x | 17.4x | 0.9x |
| Wed, 20 Sep 2023 | R471.8b | R473.6b | R25.2b | 8x | 18.7x | 1x |
| Fri, 18 Aug 2023 | R512.1b | R473.0b | R25.3b | 5.8x | 20.2x | 1.1x |
| Sun, 16 Jul 2023 | R524.2b | R457.6b | R24.1b | 6.4x | 21.7x | 1.1x |
| Tue, 13 Jun 2023 | R540.9b | R454.7b | R39.2b | 7.1x | 13.8x | 1.2x |
| Thu, 11 May 2023 | R506.8b | R442.1b | R38.8b | 7.3x | 13x | 1.1x |
| Sat, 08 Apr 2023 | R554.8b | R442.1b | R38.8b | 7.9x | 14.3x | 1.3x |
| Mon, 06 Mar 2023 | R597.7b | R427.0b | R38.5b | 8x | 15.5x | 1.4x |
| Wed, 01 Feb 2023 | R580.1b | R426.3b | R39.1b | 7.2x | 14.8x | 1.4x |
| Fri, 30 Dec 2022 | R546.8b | R426.3b | R39.1b | 6.9x | 14x | 1.3x |
| Sun, 27 Nov 2022 | R534.5b | R424.5b | R41.1b | 8.6x | 13x | 1.3x |
| Tue, 25 Oct 2022 | R501.6b | R420.3b | R42.4b | 8.9x | 11.8x | 1.2x |
| Thu, 22 Sep 2022 | R530.7b | R420.3b | R42.4b | 8.9x | 12.5x | 1.3x |
| Sat, 20 Aug 2022 | R561.7b | R420.8b | R42.3b | 8.9x | 13.3x | 1.3x |
| Mon, 18 Jul 2022 | R575.8b | R409.9b | R37.0b | 8.5x | 15.6x | 1.4x |
| Wed, 15 Jun 2022 | R559.0b | R410.4b | R37.0b | 8.7x | 15.1x | 1.4x |
| Fri, 13 May 2022 | R646.2b | R406.8b | R35.6b | 9.5x | 18.2x | 1.6x |
| Sun, 10 Apr 2022 | R672.5b | R406.8b | R35.6b | 8.9x | 18.9x | 1.7x |
| Tue, 08 Mar 2022 | R652.6b | R388.8b | R28.7b | 15.3x | 22.7x | 1.7x |
| Thu, 03 Feb 2022 | R663.5b | R388.8b | R28.7b | 15.3x | 23.1x | 1.7x |
| Sat, 01 Jan 2022 | R620.9b | R389.0b | R28.4b | 14.2x | 21.8x | 1.6x |
| Mon, 29 Nov 2021 | R590.8b | R389.1b | R28.4b | 14.1x | 20.8x | 1.5x |
| Wed, 27 Oct 2021 | R561.2b | R385.9b | R29.4b | 14.9x | 19.1x | 1.5x |
| Fri, 24 Sep 2021 | R574.7b | R385.9b | R29.4b | 15.6x | 19.5x | 1.5x |
| Sun, 22 Aug 2021 | R543.2b | R385.6b | R29.1b | 17.1x | 18.7x | 1.4x |
| Fri, 09 Jul 2021 | R482.9b | R385.6b | R29.1b | 23.2x | 16.6x | 1.3x |
Price to Earnings Ratio
14.5x
Current Industry PE
- Investors are optimistic on the South African Communication Services industry, and appear confident in long term growth rates.
- The industry is trading at a PE ratio of 27.4x which is higher than its 3-year average PE of 17.1x.
- The 3-year average PS ratio of 1.3x is higher than the industry's current PS ratio of 0.86x.
Past Earnings Growth
- The earnings for companies in the Communication Services industry have declined 26% per year over the last three years.
- Meanwhile revenues for these companies have grown 3.8% per year.
- This means that although more sales are being generated, either the cost of doing business or the level of investment back into businesses has increased, which has decreased profits.
Industry Trends
Which industries have driven the changes within the South African Telecom sector?
| ZA Market | 1.41% | |
| Telecom | 2.80% | |
| Telecom Services and Carriers | 3.71% | |
| Wireless Telecom | 2.80% | |
| Media | 0.023% | |
| Entertainment | 0% | |
| Interactive Media and Services | 0% | |
Industry PE
- Investors are most optimistic about the Wireless Telecom industry, which is trading close to its 3-year average PE ratio of 15.1x.
- Analysts are expecting annual earnings growth of 24.3%, which is higher than its past year's earnings decline of 36.0% per year.
Forecasted Growth
- Analysts are most optimistic on the Telecom Services and Carriers industry, expecting annual earnings growth of 120% over the next 5 years.
- This is better than its past earnings growth rate of 79% per year.
- In contrast, the Wireless Telecom industry is expected to see its earnings grow by 24% per year over the next few years.
Top Stock Gainers and Losers
Which companies have driven the market over the last 7 days?
| Company | Last Price | 7D | 1Y | Valuation | |
|---|---|---|---|---|---|
| MTN MTN Group | R93.78 | 3.5% +R5.8b | -21.2% | PE41.4x | |
| VOD Vodacom Group | R92.37 | 2.1% +R3.7b | -22.6% | PE10.3x | |
| TKG Telkom SA SOC | R24.95 | 4.2% +R493.9m | -21.5% | PS0.3x | |
| BLU Blue Label Telecoms | R4.39 | 2.1% +R80.7m | 5.8% | PE5.2x | |
| HUG Huge Group | R2.14 | 7.0% +R24.2m | -20.7% | PE10.4x |
