OTE: Shall we roam in Greece this summer? (downgraded to HOLD)
We have updated our view on OTE and downgraded our recommendation to HOLD, from Buy, with our price target (PT) lifted from EUR 15.6 to EUR 16.9, implying 11% upside potential. We appreciate the strong investor remuneration offered by OTE (10% in 2021E, 7-9% in 2022-23E, on our estimates), but we lack a major trigger that could unlock OTE’s value in the short term, especially given its rather rich valuation, at 2021-22E 6.0-5.8x EV/adjusted EBITDAs, on our estimates, implying 14-15% premiums vs. its peers. The Romanian mobile business sale could be such a trigger but, according to DT’s CEO for Europe, the process has been ceased. On the other hand, we see the risk of a pricey 5G auction in Romania, which could harm OTE’s FCF and dividends, or mean a further lag in service quality, if the company decides not to participate in the spectrum distribution process.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.
WOOD & Company is the leading investment bank in Emerging Europe. Founded in 1991 and head-quartered in Prague, our footprint spans the region and touches investors around the globe.
A pioneer in Emerging Europe, WOOD executed many of the first CEE equity trades and landmark investment banking transactions. Our electronic trading platform was the first in the region, and remains the best. We are continually expanding our relevance and reach in these ever-evolving markets.
Our equity market share reflects our stature: 7% in Warsaw, 20% in Bucharest, 16% in Hungary, 40% in Prague and 5% in Vienna. Our distribution is unparalleled, with the largest salesforce in the region, servicing a uniquely diverse investor base.
We couple local expertise with a truly international perspective. With offices on the ground in the region, and in key financial hubs such as London and Milano, we are never far from our clients and we remain at the forefront of what’s afoot in the CEE emerging and frontier landscape.
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