NII Holdings Inc. (NIHD): Strong 2Q, Raising PT, Still a Top Pick Stock Rating: 1-Overweight Sector Rating: 1-Positive Price: US$ 81.70 Price Target: US$ 112.00 Current Year EPS: 2.14 Next Year EPS: 3.23 Market Cap: US$ 13954 (m) We are increasing our estimates and price target for NIHD following strong 2Q07 results and improved '07 guidance. We believe yesterday's weakness was the result of broader market pressures and reiterate NIHD as a top pick. 2Q07 highlights include net adds of 331k (315k est), EBITDA of $220M ($221M est), ARPU of $58 ($58 est) and churn of 1.6% (1.6% est). '07 guidance increased for net adds to 1.28M from 1.2M and for cash EBITDA to $965M from $950M. We are raising our est to 1.3M from 1.25M and see pot'l upside. The high net adds result in higher acquisition costs, so '07 EBITDA goes to $970M from $980M. However, CPGA is running below our prior est and we are modestly increasing our '08 EBITDA est to $1.40B from $1.36B. '07 capex guidance incr to $650M from $575M due to higher subs, FX and investments in Brazil and Chile. Based on NIHD's plans to expand cov'g in Brazil, we are increasing our longer term net add and EBITDA estimates. We now see EBITDA growing at a 5-year CAGR of 27% vs. 23%. Despite higher expansion capex, we still project substantial cash flow. Specifically, we expect FCF to grow 10x from $112M in '07 to $1.0B in '10.