Zacks Investment Research downgraded shares of America Movil S.A.B. de C.V. – ADS (AMX) from NEUTRAL to UNDERPERFORM on March 01, 2013, with a target price of $19.00.
We downgrade our recommendation on America Movil to Underperform from Neutral. While the company's top line surpassed our expectation, the bottom line disappointed. The interconnection rate reductions in both Mexico and Brazil, regulatory issues in certain markets, and a declining wireline subscriber base remain the key issues with the company. While we believe wireless market in Mexico continues to grow, maturation of Latin American wireless markets and margin pressure will prevent the company from experiencing the same level of growth that it has registered historically. Moreover, aggressive marketing strategies of the company for promoting smartphone penetration will also result in additional cost pressure.
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