America Movil 2Q26: Solid mobile service revenue in Mexico and Colombia, with recurring margin better than expected

Overview

This report is Goldman Sachs' first take on America Movil's 2Q26 results. The core view is that overall revenue was in line with expectations and EPS was below expectations due to higher taxes and financial expenses, but operating quality was better than headline earnings suggested; mobile service revenue was solid in Mexico and Colombia, EBITDA margin excluding the one-off Telmex regulatory fine was materially better than Goldman Sachs' estimate, and capex was also below expectations. Goldman Sachs expects the near-term market reaction to the stock to be modestly positive and maintains its Buy rating.

Core views

Goldman Sachs' core views are: first, AMX's mobile service revenue trend remains supported, particularly with continued acceleration or strong growth in Mexico and Colombia; second, reported EBITDA margin was weighed down by the one-off Telmex fine, but recurring margin demonstrates stronger cost control and operating leverage; third, Brazil is the main relative weak spot, with mobile service revenue below expectations and growth slowing, potentially reflecting rising competitive pressure; fourth, capex below expectations, declining leverage, and strong FCF generation give the company the capacity to continue shareholder returns or pursue M&A.

Analysis framework

The report uses an earnings preview framework, comparing AMX's 2Q26 revenue, EBITDA margin, EPS, capex, leverage, and buyback activity with Goldman Sachs' forecasts and Bloomberg consensus, while breaking down revenue growth, subscriber growth, and margin performance in Mexico, Brazil, Europe, and Colombia by country. For valuation, Goldman Sachs combines FCFF DCF and EV/EBITDA multiple methods on an equal-weighted basis to determine the 12-month target price.

Methodology notes

• Earnings comparisonActual results versus Goldman Sachs estimates and Bloomberg consensus

  Assess earnings quality through deviations in revenue, margins, EPS, and capex relative to expectations.

  Revenue was in line with expectations, but EPS was weighed down by taxes and financial expenses; EBITDA margin excluding one-off items and capex performance better reflect operating quality.

• Segment analysisCountry-level operating breakdown

  Evaluate mobile, fixed-line, and EBITDA margins across Mexico, Brazil, Europe, and Colombia.

  Mexico and Colombia were positive contributors, while slowing mobile service revenue in Brazil was the main risk point; revenue and margins in Europe were generally stable.

• Valuation methodsEqual-weighted FCFF DCF and EV/EBITDA valuation

  The 12-month target price consists of 50% FCFF DCF and 50% EV/EBITDA multiple valuation.

  Goldman Sachs' target price is USD 31.70/ADR for AMX and MXN 28.50/share for AMXB.MX; the multiple-based portion uses a Q5-Q8 EV/EBITDA multiple of 5.5x, based on five-year historical valuation adjusted for the cycle.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• AMX.N

  Core covered asset, US ADR

  Strengths

  Buy rating; 12-month target price of USD 31.70/ADR; solid mobile service revenue in Mexico and Colombia, recurring EBITDA margin above expectations, and capex below expectations.

  Weaknesses

  EPS below Goldman Sachs' and consensus estimates; Brazil mobile service revenue below expectations and slowing; the one-off Telmex regulatory fine weighed on reported margin.

  Comparison

  Relative to Goldman Sachs' expectations, revenue was broadly in line, reported EBITDA margin was slightly better than expected, margin excluding one-off items was materially better than expected, but EPS was below expectations.

  Risks

  Economic activity in Latin America and Eastern Europe weaker than expected, inflation higher than expected, stricter asymmetric regulation in Mexico, and MVNO competition eroding the low-income customer base.

• AMXB.MX

  The same company's locally listed Mexican stock

  Strengths

  12-month target price of MXN 28.50/share, implying 25.3% upside; benefits from the same operating improvement and FCF thesis.

  Weaknesses

  Similarly exposed to Mexican regulatory, competitive, and regional macroeconomic risks.

  Comparison

  AMXB.MX's 25.3% target-price upside is higher than the 21.5% upside for AMX ADR.

  Risks

  The local share price may also be affected by Mexican market conditions, foreign exchange, and regulatory expectations.

Key data

• AMX 12-month target priceUSD 31.70/ADRAgainst the current price of USD 26.09, implying 21.5% upside.
• AMXB.MX 12-month target priceMXN 28.50/shareAgainst the current price of MXN 22.75, implying 25.3% upside.
• Total service revenue growth+3.1% YoY+5.1% on a constant-currency basis.
• Mobile service revenue growth+6.5% YoYClose to the +6.4% constant-currency growth recorded in 1Q26.
• Fixed service revenue growth+2.7% YoYAccelerated from +1.7% in 1Q26, mainly driven by broadband revenue growth.
• Reported EBITDA margin39.8%30 basis points above Goldman Sachs' estimate.
• EBITDA margin excluding the one-off Telmex fine40.9%Recurring margin was 140 basis points above Goldman Sachs' estimate.
• EPSMXN0.40; USD0.47/ADRBelow Goldman Sachs' estimate of MXN0.42, mainly due to higher taxes and financial expenses.
• Quarterly capexApproximately MXN26.5bnBelow Goldman Sachs' estimate of MXN28bn and showing a slowing trend.
• Leverage1.31x net debt/EBITDAaLExcluding the impact of IFRS16, net debt declined by approximately MXN31bn.
• Mexico mobile service revenue+6.6% YoYAccelerated further from +5.7% in 1Q26, supported by improving ARPU.
• Brazil mobile service revenue+6.1% YoYBelow Goldman Sachs' estimate of +8.7% and slower than +7.8% in 1Q26.
• Colombia mobile service revenue+10.5% YoYAccelerated further from +10.2% in 1Q26, reflecting healthier postpaid performance and ARPU.

Impact & implications

The report is positive in terms of investment implications: AMX's core mobile business continues to show growth momentum in Mexico and Colombia, recurring profitability was better than expected, and capex below expectations improves the FCF outlook. If the upcoming conference call confirms that the Telmex fine was indeed a one-off item, the market may focus more on the resilience of margins excluding this item. However, slowing mobile revenue in Brazil and potentially intensifying competition limit the upside elasticity of the earnings interpretation.

Risks

• Economic activity in Latin America and Eastern Europe weaker than expected could reduce net additions and constrain revenue growth.
• Higher-than-expected inflation could weaken AMX's pricing power and weigh on margins.
• Stricter asymmetric regulation in Mexico could compress margins and limit network monetization.
• Mexican MVNOs, such as Walmex's Bait, could erode AMX's customer base, particularly among low-income customers, if they continue to expand aggressively.
• Slowing mobile service revenue growth in Brazil could indicate a more intense competitive environment.
• EPS is sensitive to taxes and financial expenses, potentially preventing operating improvements from fully translating into net income performance.

What to watch

• The earnings call's explanation of the one-off Telmex regulatory fine and whether the item is truly non-recurring.
• Whether the improvement in Mexico mobile service revenue and ARPU can continue.
• Whether postpaid performance, ARPU, and the competitive environment in Colombia remain healthy.
• Whether Brazil mobile service revenue slows further and competitive pressure increases.
• Whether capex below expectations can continue to translate into stronger FCF.
• Whether the company increases shareholder returns or uses FCF for further M&A.