It's a season of DowngradesApplause Applause Applause


All in all unless Safaricom cuts it's operational costs i expect full year EBITDA to drop by 15-30% because i expect ARPU to continue falling as inflation and the recent price hike forces customers to switch to cheaper options, the weak Shilling will also continue to pose a challenge thus i expect full year EPS to come in around Sh0.23. So at the current price of Sh3.30-Sh3.35 I rate Safaricom Expense/Sell/Avoid since I don't expect it to gain by more than 15% from this current price levels. My target price is Sh2.30 by June 2012.

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I think Safaricom will be last man standing in this harsh telecom game and that is partly why the stock is catching a bid.Safcom is asserting itself as the leader in the industry and with mpesa,data,cloud computing and tech growing as the economy expands it just means brighter days for Safcom.The worst thing Safcom did was float too many shares during the IPO.I would be a buyer if it dips below 3.10