New Street: OTE (Hellenic) (Buy, TP: €21.0, +39%) Q3 21: Good underlying trends, energy costs a drag - Quick Take
OTE has reported a slightly mixed set of results with good underlying results, but slightly weak at the headline level thanks to elevated energy costs and weak low margin wholesale revenue. Despite the unexpected energy drag, EBITDA was only just light of expectations, and guidance has been maintained (probably would have been lifted if not for the energy costs in our view). OTE is still the cheapest stock in the sector, despite being perhaps the most geared into a post COVID recovery (roaming and ERF – read our recent report and TP upgrade based on ERF upside HERE).Hellenic Telecommunications Organization is a full-service telecommunications group. Co. provides local, long-distance and international fixed-line telecommunications services in Greece and Romania, and mobile telephony services through its Cosmote subsidiary in Greece, as well as in Albania, Bulgaria, the Former Yugoslav Republic of Macedonia and Romania. Co. also provides internet access services and Internet Protocol (IP) -based telecommunications applications, as well as information technology application development and hosting services using IP technologies. Also, Co. provides several other telecommunications services, including value-added services and public telephone services.
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