- Price
- $18.67
- Fair value
- $22.00
- Discount
- 15.1%
- Uncertainty
- High
- LSEG rating
- 2.86
- Moat
- None
- Next earnings
- 2026-10-28
- Next earnings is estimate
- Yes
- Company name
- TIM S.A.
- Sector
- Mobile and fiber telecom (Brazil)
- About
- TIM S.A. (TIM Brasil) is one of the three large mobile network operators in Brazil, based in Rio de Janeiro. It had 61.9 million mobile customers at June 30, 2026, of which 33.7 million were postpaid. It also sells fiber broadband to homes under the TIM Ultrafibra brand, with 899,000 customers, and services to businesses, such as IoT and IT services through V8.Tech. It owns the fiber network company I-Systems. Its shares trade on B3 in São Paulo, and its ADRs trade on the NYSE; each ADR represents five common shares. Telecom Italia controls TIM Brasil, and since September 2026 Poste Italiane has controlled Telecom Italia. Net revenue was R$6.97 billion in Q2 2026.
- Thesis
- The market prices TIM Brasil for the risks of Brazil and for the slow growth of a mature mobile market. Brazilian interest rates are high, the real can lose value against the US dollar, and taxes and rules can change. The three operators compete hard for prepaid customers, and prepaid revenue fell 6.9% in Q2 2026. A new controlling shareholder can also change the strategy or the dividend policy: Poste Italiane took control of Telecom Italia, TIM Brasil's parent, in September 2026. Results are steady: in Q2 2026, service revenue rose 5.7%, normalized EBITDA rose 7.0% with a 51.5% margin and normalized net income rose 6.2% to R$1.04 billion. TIM Brasil plans to pay R$5.3 billion to R$5.5 billion to shareholders in 2026. For the gap to close, three things must be true. Service revenue must keep growing faster than inflation, with postpaid and fiber growth. The EBITDA margin must keep rising as TIM controls costs. Poste Italiane must keep TIM Brasil's strategy and its high shareholder payouts. The Q3 2026 report, estimated for about October 28, 2026, is the next test. The 2027 plan and guidance, usually in February, are the main test. If these checks pass, the gap can close slowly over the next one to two years. The main reason it may not close is the country risk of Brazil, which the company cannot control.
- Risks
- All of TIM Brasil's business is in Brazil. High interest rates, a weaker real, inflation or changes in taxes and telecom rules can lower its value in US dollars.
Poste Italiane became the indirect controlling shareholder in September 2026. It can change the board, the strategy or the dividend policy.
Claro and Vivo compete hard with TIM Brasil, mostly for prepaid customers. Prepaid revenue fell 6.9% in Q2 2026, and price competition can slow revenue growth.
TIM Brasil has tax disputes, such as those on the FUST and FUNTTEL telecom funds. Losses in these disputes can lead to large payments.
- Balance sheet
- Cash: R$4.5B
Debt: R$2.6B
Net cash: R$1.9B
Debt due within 12 months: R$1.1B
TIM Brasil has net cash before leases. At June 30, 2026, total financial debt was R$2.65 billion, of which R$1.11 billion was short-term, and cash, cash equivalents and marketable securities were R$4.53 billion. With net derivatives of R$230 million, net debt was minus R$2.11 billion, a net cash position. The 5G license liability was R$1.02 billion and lease liabilities were R$13.61 billion, so total net debt including leases was R$12.52 billion, or 0.89 times normalized EBITDA. Financial debt is in Brazilian reais or hedged, and it includes debentures due 2028, BNDES loans and the debt of I-Systems and V8.Tech. Capex was R$935 million in Q2 2026 and R$2.29 billion in the first half of 2026.
As of 2026-06-30.
- Checkpoints
- Oct 28, 2026 (estimate): Q3 2026 earnings: service revenue and margin. Pending. Watch: Service revenue growth of 5% or more and a higher EBITDA margin pass; slower growth or a lower margin fails.
Feb 2027 (estimate): 2026 results, the 2027 plan and the shareholder payout. Pending. Watch: A plan that keeps the strategy and raises shareholder payouts under the new controlling shareholder passes; lower payouts or a change of strategy fail.
- Recent events
- 2026-10-02: TIM Brasil said that Poste Italiane held about 85.8% of Telecom Italia after the second acceptance period of its offer. Telecom Italia is the controlling shareholder of TIM Brasil.
2026-09-18: TIM Brasil said that Poste Italiane had become the controlling shareholder of Telecom Italia through a public tender and exchange offer, and so the indirect controlling shareholder of TIM Brasil.
2026-09-17: The board approved R$515 million of interest on capital, payable by January 22, 2027, and cancelled 13.2 million treasury shares bought under its buyback program.
2026-07-28: TIM Brasil reported Q2 2026 results. Net revenue rose 5.5% to R$6.97 billion and service revenue rose 5.7%. Normalized EBITDA rose 7.0% to R$3.59 billion, a 51.5% margin. Normalized net income rose 6.2% to R$1.04 billion. Postpaid customers rose 6.8% and TIM Ultrafibra customers rose 12.5%. In July 2026, the board approved capital contributions of up to R$600 million to I-Systems and up to R$70 million to V8.Tech, mainly to prepay their debt.
2026-06-17: The board approved R$400 million of interest on capital.