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Telco/Internet specialist

Kirk Boodry

Redex Research

Equity Bottom-Up

NTT (Nippon Telegraph & Telephone) / Equity Bottom-Up

NTT (Nippon Telegraph & Telephone) (9432 JP)

<p>NTT posted mixed Q1 results with better revenue but a modest miss on profitability. Top-line growth was helped by demand for telework (local exchange businesses) and a rebound in international sales (NTT Data / NTT Ltd) whilst higher mobile investment impacted operating profit. Of more interest to shareholders, management confirmed it would buy back up to ¥250bn of its own shares, better than the ¥150bn we were expecting, with a very modest increase in its FY21 EPS target as a result (¥300 to ¥302). NTT continues to trade at attractive multiples versus peers even as underlying operational performance improves. We remain at Buy.</p>

NTT posted mixed Q1 results with better revenue but a modest miss on profitability. Top-line growth was helped by demand for telework (local exchange businesses) and a rebound in international sales (NTT Data / NTT Ltd) whilst higher mobile investment impacted operating profit. Of more interest to shareholders, management confirmed it would buy back up to ¥250bn of its own shares, better than the ¥150bn we were expecting, with a very modest increase in its FY21 EPS target as a result (¥300 to ¥302). NTT continues to trade at attractive multiples versus peers even as underlying operational performance improves. We remain at Buy.

NTT (Buy) - Q1 21 Results Reaction: Buyback Confirmed