Key Takeaways
- América Móvil shares jumped about 6% on Wednesday after third-quarter net profit rose 7% to Ps 24.28 billion. Earnings topped Zacks’ consensus but trailed LSEG’s.
- The business grew faster than its profit: EBITDA rose 8.9%, while currency losses pushed financing costs up 75%.
- Analysts expect normalized EPS to climb from $1.59 in 2025 to $2.39 in 2028.
- The stock’s forward P/E sits just below its five-year average and well below its 2021 peak.
América Móvil (AMX) shares jumped about 6% on Wednesday after the Mexican telecom’s third-quarter net profit rose 7% from a year earlier.
The rest of the quarter was even better than that number.
The details
America Móvil reported after Tuesday’s close. The highlights:
- Net profit of Ps 24.28 billion ($1.32 billion), up 7%
- Revenue of Ps 250.63 billion, up 7.6%, with service revenue up 7.2%
- Operating profit of Ps 57 billion, up 13.9%
- EBITDA of Ps 102.16 billion, up 8.9%, for a 40.8% margin
- Adjusted earnings of $0.47 per ADR, ahead of Zacks’ $0.46 consensus and up from $0.40 a year ago
Profit trailed the business because of currency. Foreign exchange losses pushed comprehensive financing costs up 75%, to Ps 22.57 billion.
The customer mix also shifted toward better-paying lines. América Móvil added 3.1 million postpaid lines, led by Brazil, and lost 5 million prepaid lines, mainly in Mexico and Colombia. In Mexico, a government-mandated user registration weighed on prepaid.
Fixed-line service revenue growth also sped up, to 3.7% from 2.7% last quarter. Brazil should help there. On Oct. 2, America Móvil closed its purchase of 72.8% of Desktop (DESK3), a fiber broadband provider in São Paulo state.
Whether the quarter counts as a beat depends on whose estimates you use. Analysts polled by LSEG expected about $1.51 billion of profit, so by their numbers it fell short.
The earnings keep compounding
Analysts expect that growth to keep reaching the bottom line. They see normalized EPS rising from $1.59 in 2025 to $2.39 in 2028…
That works out to about 13% a year from this year’s $1.88. Revenue and EBITDA both grew faster than profit this quarter, so nothing here gives analysts a reason to cut their numbers.
TIKR tracks 14 analysts on América Móvil. How many say “Buy”?
See the full breakdown of Buy, Hold, and Sell ratings on América Móvil, along with Wall Street’s revenue and earnings estimates, all in one place. More than 500,000 investors use TIKR to research stocks like this one. See América Móvil’s Analyst Ratings
Still well short of its peak multiple
The market isn’t paying much extra for that growth. At Tuesday’s close, América Móvil traded at 12.8x forward earnings. That’s a little above its five-year average of 12.1x and well below its 15.4x peak in December 2021…
By Friday’s close, it had slipped back to 11.7x, below that average. Shares fell 1.6% that day to close near $25. The average analyst price target of about $29 sits roughly 20% higher.
To me, the jump looks earned. A stock near 12x forward earnings, with earnings expected to grow about 13% a year, is a fair deal. And the multiple has plenty of room left before it gets back to its 2021 high.
Of course, the peso cuts both ways. The currency swings that cost América Móvil this quarter could just as easily help or hurt the next one. And the peso sank to an 11-month low the same week.
Competition at home is heating up, too. Grupo Televisa (TV) is buying AT&T (T)‘s Mexico unit, the country’s No. 2 mobile carrier, for $2 billion. Scotiabank (BNS) called the cheap price “bad news” for America Móvil, since the buyers can spend more on their network. That deal should close in early 2027.
The fourth-quarter report, expected around Feb. 9, is the next test.
So what is América Móvil stock actually worth?
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Disclaimer:
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