Infrastrutture Wireless SpA (INWT.MI): Introducing a new investment framework to account for heightened complexity; down to Neutral

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Infrastrutture Wireless SpA (INWT.MI): Introducing a new investment framework to account for heightened complexity; down to Neutral

Goldman Sachs Infrastrutture Wireless SpA (INWT.MI)

PM summary: Our new investment framework lays out potential upside and downside drivers from

here

INWIT’s equity story is subject to heightened operating and structural uncertainty.

Existing stock overhangs have been amplified by developments in contract negotiations,

which culminated in both anchor tenants issuing termination notices for their MSAs. We

expect a constructive outcome over time, likely involving some concessions being

exchanged for long-term volumes. Our new base case represents c.15% upside

potential if INWIT rerates to trade in line with historical multiples. However, this is

dependent on the pricing and volume outcome of negotiations, which layers further

complexity on top of the existing structural overhangs already impacting investor

confidence. On our most bullish outcome, we see c.50% upside; whereas our most

bearish outcome implies even greater downside. The wide range of outcomes makes it

more challenging for investors to look through the complexity, in our view. We therefore

downgrade INWIT to a Neutral rating with a new TP of €7.3. This note presents an

investment framework laying out potential upside and downside drivers from here.

Exhibit 1: Our new scenario analysis looks at a range of Exhibit 2: Our base case assumes an NPV +ve scenario,

outcomes on both pricing and future volume growth though we note a wide range of potential outcomes

2028-2050E EBITDAaL indexed to 2028

Scenario 1 250

Scenario 2

(Base case)

Guidance

scenario 150

Scenario 3

2028 2029 2030 2031 2032Scenario2033 20341 2035 2036 2037 2038

Scenario 4 Scenario 3