Zacks senior Latin American market analyst Claudio Freitas, CFA had this to say in his report where he reiterates his Sell recommendation on shares of Brazilian wireless phone company TIM Participações S.A. (TSU):

'We are keeping our current Sell recommendation on TIM Participações. Third quarter results were disappointing, and the less benign Brazilian monetary policy is a source of concern.

'The competitive environment for the Brazilian wireless sector also remains a problem and is the main reason why the company has been unable to translate competitive advantages into profits. Additionally, the result of the recent 3G license auction was highly disappointing.

'Also, TSU's current valuation is not particularly attractive. Presently, TIM Participações S.A. is trading at an enterprise value to EBITDA (a common valuation metric for the wireless industry) of 7.1x the 2008 estimated EBITDA. In our opinion, the current valuation seems to be excessive compared to other Brazilian telecom operators, particularly Vivo (VIV), which has been posting improving results.

'The deal with Spain's Telefonica (TEF) and Telecom Italia (TI) in Europe was much better for Vivo than for TSU; in this sense, we expect the valuation of both companies to converge in the short-to medium term.

'All considered, we are keeping our recommendation on TSU as a Sell. Our target price is US$32.50, which is based on an EV/20007 estimated EBITDA multiple around 6.7x.'