Stable Q3 for Swisscom; Company To Modify Fiber-to-the-Home Rollout

Narrow-moat Swisscom made a slight adjustment to 2022 guidance during its third-quarter earnings call and now expects sales to be in the lower part of its guided range, close to CHF 11.1 billion. This is due to the strengthening of the Swiss franc against the euro, not because of fundamental reasons. EBITDA and capital expenditure guidance remained unchanged. Revenue pressures have been easing for Swisscom during 2022, and this quarter continued to show improved trends after a tough 2021. Service revenue in Switzerland remained flat, after low- to mid-single-digit declines in the previous six quarters. The consumer division showed stable market share and prices, while the business division still faces pressure over prices, although these have been easing in the past 12 months. We maintain our CHF 470 fair value estimate.