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"Citi Recommends Buying Mexico-Based Telecom Stock Following Recent Pullback"

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América Móvil Stock: Citi Recommends Buying Opportunity After Recent Pullback

Upgrade and Price Target Increase

Citi, a prominent financial institution, has upgraded the Mexican telecom stock, América Móvil, from neutral to buy in a recent note. Additionally, they have raised the price target to $23.50. This adjustment implies a potential upside of over 26% from the previous closing price of $18.63.

Steady Year-to-Date Performance

América Móvil stock has shown resilience, with a year-to-date increase of 2.4%. Despite slipping more than 18% in the past three months, the recent pullback is primarily attributed to concerns over capital expenditures and sellers fleeing due to an August MSCI rebalance.

An Attractive Entry Point

Analyst Andrés Cardona views the current situation as an attractive entry point for investors to consider adding América Móvil stocks to their portfolios. Cardona believes that the aforementioned concerns will subside in the short term, presenting a favorable opportunity for potential buyers.

Potential Acceleration of Buyback Program

Cardona also highlights the likelihood of the AMX buyback program gaining momentum in the second half of 2023, driven by NWC seasonality. This anticipated acceleration could result in the repurchase of up to $1 billion worth of stock over the latter part of the year.

Positive Outlook

Citi's positive outlook on América Móvil's stock is supported by the expectation that the company will continue its buyback program. This, coupled with the potential resolution of capital expenditure concerns and the impact of the August MSCI rebalance, further strengthens the case for considering an investment in the company. In conclusion, Citi's upgrade of América Móvil's stock and the raised price target indicate a buying opportunity after the recent pullback. Despite the stock's decline in the past few months, this setback is attributed to temporary factors that are expected to diminish. With the potential acceleration of the buyback program and a positive outlook, investors may find América Móvil stocks to be an appealing addition to their portfolios.

Implications for New Businesses

The recent developments in América Móvil's stock, as highlighted by Citi, present a compelling narrative for new businesses, particularly those in the telecom sector or those considering investment in this space.

Investment Opportunities

The upgrade from neutral to buy and the increased price target suggest a significant potential upside. This could be an attractive proposition for new businesses looking for investment opportunities with promising returns. The recent pullback in América Móvil's stock, attributed to temporary concerns, presents a potentially lucrative entry point.

Resilience Amid Challenges

América Móvil's steady year-to-date performance, despite a more than 18% slip in the past three months, demonstrates resilience. This resilience could serve as a valuable lesson for new businesses navigating market volatility.
Buyback Program and Positive Outlook
The expected acceleration of the buyback program and the overall positive outlook on América Móvil's stock further bolster the case for investment. New businesses could take this as an indication of the company's confidence in its future prospects. In conclusion, the recent developments in América Móvil's stock could have significant implications for new businesses. Whether as a potential investment opportunity or a case study in resilience and strategic financial management, América Móvil's situation offers valuable insights for emerging companies.
Article First Published at: https://www.cnbc.com/2023/08/17/buy-this-mexico-based-telecom-stock-after-a-recent-pullback-citi-says.html
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