IHS Holding $IHS Three Inside Up Pattern, Downtrend Channel Breakout

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IHS Holding $IHS stock recently formed a bullish Three Inside Up candlestick pattern (red square in chart below) as it broke through downtrend channel resistance on November 22, 2022. The money flow is rising and the MACD is positive, both bullish indicators.

IHS Holding stock chart on November 22 2022 in uptrend channel with downtrend channel breakout and a positive MACD and rising money flow
IHS Holding stock chart on November 22 2022 in uptrend channel with downtrend channel breakout and a positive MACD and rising money flow

The stock is in a technical weak uptrend which would be upgraded on a break above $7.83 resistance.

IHS Holding price target raised at Cowen

On November 16, 2022, Colby Synesael, a Cowen analyst, increased the price target for IHS Holding from $27 to $29 while maintaining an Outperform rating for the stock. According to the analyst, Project Green is in place, the B/S is flexible, and the float is getting better. The business is also proving to be resilient. He anticipates a continuation of the valuation unlock.

IHS Holding Limited Reports Q3 2022 Financial Results

On November 15, 2022, IHS Holding reported financial results for the third quarter ending September 30, 2022. The company missed on EPS but beat on revenue. IHS Holding reported Q3 EPS of (14c) versus the consensus estimate of 5c. The company reported Q3 revenue of $521.3M versus the consensus estimate of $485.56M.

Q3 2022 Highlights

Revenue increased 30.2% (or 23.1% organically) to $521.3 million
Adjusted EBITDA was $274.7 million and Adjusted EBITDA margin was 52.7%
Loss for the period was $52.5 million
Cash from operations was $294.2 million
Recurring Levered Free Cash Flow (“RLFCF”) was $91.4 million
Capital expenditures were $174.1 million
Raise 2022 guidance for revenue by $20.0 million, Adjusted EBITDA by $10.0 million, and RLFCF by $10.0 million at the mid-point and reiterate 2022 capital expenditures (“capex”) guidance

EO Sam Darwish stated, “We had a strong quarter driven by continued secular demand, plus incremental recurring revenue and a one-time catch-up payment after reaching agreement on certain contractual terms with a Key Customer. While resolution including the one-time catch-up payment had already been assumed in guidance, we expected this to occur in 4Q 2022 opposed to this quarter. Based largely on the strong secular demand as well as additional upside from power revenue and lower withholding taxes, and despite a $11.1M FX headwind vs. rates previously assumed in guidance, we are raising our 2022 guidance for revenue, Adjusted EBITDA, and RLFCF…We appreciate in today’s macro environment it is important to be prudent and that having a strong balance sheet is critical. Furthering this point, as of September 30, 2022, our leverage remained at 3.1x or the low-end of our 3x-4x target. In addition, on October 24, 2022, we announced our Carbon Reduction Roadmap…Under Project Green, the next significant step of our CRR, we expect to spend $214.0M in capex towards these efforts between 2022 and 2024, including $110.0M in 2022, and to deliver annual RLFCF savings of $77.0M in 2025. This in turn is expected to generate an implied return on investment of 30%. We subsequently raised our 2022 capex guidance to $645M-$685M from $545M-$585M, as we also narrowed the original range based on actual spend YTD.”

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