Euskaltel: A tougher outlook but still a BUY
Euskaltel’s 2017 operational performance has so far fallen short of our expectations. The increase in FTTH competition has been higher than we thought, at least in its Galician unit, leading to weakness in the top line. As a consequence and ahead of the group’s Investor Day on November 13 we cut our 2018E-20E revenue and EBITDA estimates by an average of 4.6% and 6.1%, respectively, placing ourselves pretty much inline with Bloomberg consensus. Our FV is cut by 24% to €9.5 but despite the tougher outlook we reiterate our BUY rating on the shares. We think EKT retains core strengths that support our positive stance: 1) Despite lower numbers, EKT should retain benchmark levels of profitability and cash flow metrics; 2) In the Basque Country EKT has been able to show a resilient performance suggesting that fixing R Cable woes in Galicia may not be a such complex task; and 3) EKT has in our view several levers to balance its operational performance: the synergies with Telecable, the potential for churn reduction at Telecable and consequently margin uplift and the possible expansion into new regions that can provide some offset to recent customer losses.Euskaltel SA is a Spain-based company engaged in the provision of integrated telecommunication services. The Company's activities are divided into three segments: Residential, Business, as well as Wholesale and Other. The Residential segment provides fixed and mobile telecommunication services, broadband and wireless Internet, as well as digital television (TV) as a single service and in packages. The Business division primarily offers fixed and mobile telephony, as well as Internet access for enterprises. The Wholesale and Other area serves wholesale customers and is responsible for the delivery of communication services, such as infrastructure leasing, information technology (IT) outsourcing, as well as sell of installation material and electronics. The Company operates in the Basque Country, Spain.
Haitong is the first international Chinese investment bank and our goal is to be the primary channel for capital flows into and out of China. During 2015 the Senior Management Team in London was expanded significantly to focus on this objective and to provide a full-service cross-asset markets business coupled with sector-focused investment banking. We work closely with our world-wide network of offices to bring a true depth of understanding to all client situations.
Unfortunately, this report is not available for the investor type or country you selected.
Browse all ResearchPool reportsReport is subscription only.
Thank you, your report is ready.
Thank you, your report is ready.