Zacks Investment Research upgraded shares of Telefonica Brasil SA (VIV) from UNDERPERFORM to NEUTRAL on December 14, 2012, with a target price of $23.00.
We are upgrading our recommendation on Telefonica Brasil to Neutral from Underperform, following mixed third quarter results. Although the company's revenue met our projection, earnings missed the Zacks Consensus Estimate. For the coming months, we expect the company to reap benefits from the expanding mobile subscriber base as well as fixed broadband Internet and Pay-TV services. However, tariff cuts, intense inflationary pressure, stiff competition and excessive government intervention could weigh on the share price. Hence, we see Telefonica Brasil as having limited upside potential, at current levels, and performing in line with the broader market.
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