reports
- James Ratzer
European Telecoms for 2026 Industry action required for further outpe...
Over the past 3 years, the EU telecoms sector has had a great run – up >50%, despite modest underlying revenue/ EBITDA growth. This has almost entirely come from a deserved upwards re-rating in the multiple as the risk profile across the sector diminishes – which has been a key theme of ours in the past few years given improved regulation. So, we feel this has now largely played out.
- James Ratzer
Vodafone (Buy, 120p, +26%) Safaricom buyout: More FCF accretive than ...
Vodafone and Vodacom have announced today that they will be taking control of Safaricom. Given the structure of the deal with Kenyan Government involving pre-paying dividends, we think the deal could offer better than expected accretion to Vodafone’s reported FCF for limited capital outflow.
- James Ratzer
Vodafone (Buy, 120p, +30%) H1 26 - Multiple re-rating in play
Vodafone has reported a decent set of H1 results and guidance has been moved to the upper-end of the guidance range (albeit us and consensus were already there). We think there is still a story for the multiple to be re-rated further – and even though there is new dividend guidance today, we also think there is potential for incremental cash return to come at the FY results.
- Russell Waller
- Russell Waller
Orange (Buy, TP: €16.2, +15%) Q3 25: Solid numbers, Group EBITDAaL gui...
Orange has reported a solid set of results, with Telco revenue and EBITDA in-line with consensus expectations; Bank losses are lower than expected and Group EBITDAaL guidance has been lifted as a result (despite a small downgrade to OBS guidance).
- Russell Waller
Orange (Buy, TP: €16.4, +21%) Bouygues (Buy, TP: €54, +39%) Altice Fra...
After months of speculation, there is finally an offer for SFR in France. The deal structure is a lot more complicated than we thought it would be, but we think the offer is a fair one. We think the offer implies a synergy payment of €4.2bn, and values the SFR equity at €15/share, if XpFibre, UltraEdge, ATS, Intelcia, and FOT are indeed worth €4bn, as the release suggests.
- Russell Waller
- Russell Waller
Altice France equity (Neutral, TP: €10.3, -14%) Altice France bonds (E...
The price war at the low end of the French mobile market, which began at the beginning of summer 2024, and which we have written about extensively (HERE, HERE, HERE and HERE), appears to be coming to an end, thanks to some tariff changes that should lead to higher APRUs. We show some new work on tariffs in France in this short report, that should be good for all the MNOs.
- Russell Waller
Altice France equity (Neutral, TP: €10.3, -14%) Altice France bonds (E...
New Altice France debt and equity is now trading. Given the material change in bond terms, and the creation of a new separately traded equity piece, we reassess our rating, and think that at these levels the bonds look pretty fairly valued, and so take the bond rating to Equal weight from Overweight (the old bonds ended up +20% from the lows), and initiate on the equity with a Neutral, as we think that the equity is already implying a high probability of a deal happening, and see minimal underli...
- Russell Waller
Altice France (Overweight) Bouygues (Buy, TP: €52, +39%) Iliad (Equal ...
There have been a few recent reports that the sale process for XpFibre has heated up. It has been suggested that a sale might eventually be pulled and the stake used as a sweetener in any eventual deal; but actually, a sale could also be the first domino in the whole M&A process, as an XpFibre sale would help to ease leverage concerns that Bouygues might have from acquiring SFR. We still think a SFR-Bouygues deal is more likely than not by year end, and that Bouygues is the best way to play this...
- James Ratzer
- Russell Waller
Why you should be reading the Tariff Tracker – a leading SR indicator
We publish monthly front book pricing data in our Tariff Tracker product. In this report we show some new analysis looking at how front book tariffs are a good leading indicator for service revenue trends in mobile and fixed, including new work looking at discounted and undiscounted prices.
- Russell Waller
Orange (Buy, TP: €15.8, +19%) MasOrange (Equal Weight) It’s not all a...
We have been long-term Buyers of Orange, and are pleased about the YTD share price performance (+37% vs the sector +10%). Some of that outperformance is probably due to the prospect of French market repair (France is 56% of the value), but actually it is the Spanish and AME divisions that cause our target to rise to €15.8 from €14.9 post the Q2 results.
- Russell Waller
Orange (Buy, TP: €14.9, +14%) Q2 25: EBITDA guidance lifted thanks to...
Orange has reported a solid set of results, with Telco EBITDA c+0.3% ahead of consensus, and has lifted Group EBITDAaL guidance thanks to AME. French KPIs are solid, but French retail SR growth has turned negative y/y. There are some encouraging signs on French front-book low-end mobile pricing in July (HERE), but clearly overall conditions remain difficult (albeit Orange is doing a good job of off-setting those difficulties at the EBITDAaL level in France).
- James Ratzer
Vodafone (Buy, £1.20, +40%) Q1 26: Clearer evidence of value over volu...
Vodafone’s Q1 results do show some signs of improving revenue growth in Germany with a more disciplined approach to pricing. We think Vodafone still looks very attractively priced at the moment, but we believe a longer-term outlook from management would help to underpin more confidence in the investment case.
- Ben Rickett
- James Ratzer
- Russell Waller
EU Telecoms: Half-time 2025 Review Sector has outperformed: More sele...
The European Telecoms continues to outperform: up 17% YTD vs. the market up 10%. While this is great to see, adding to the 12pp outperformance in 2024 and supporting our investment thesis of improving regulation, it does mean the equity upside story from here is becoming more selective.
- Russell Waller
Altice International (Equal Weight) Sale process Hot-ting up in Israe...
Bezeq has confirmed that its subsidiary, Pelephone, has made an offer for Altice International’s Israeli business, Hot Mobile, HERE, for NIS2bn (c€500m). In addition, it seems that Cellcom and Hot have sold their stakes in IBC, HERE. Cellcom has sold its 23% stake for NIS520m (c€130m), and we would assume that Altice has sold its 23% stake for the same amount. In this report we look at the implications of the sales for ATCI lenders.
- Russell Waller
Altice France (Overweight) Iliad (Equal Weight) Bouygues (Buy, TP: €55...
There have been several recent articles about French M&A. The latest article from TMT finance yesterday has some fairly specific details, and most importantly, seems to suggest that the price demanded for SFR is now approaching what we would see as fair value.
- James Ratzer
- Russell Waller
- James Ratzer
Vodafone to Virgin spectrum sale: More details revealed
As part of the Vodafone-Three merger (VOD3UK), the merging companies committed to sell a portfolio of spectrum to VMO2. The details of that spectrum portfolio have now been formally disclosed by Ofcom, which has published a notification listing the frequencies that are due to be transferred (LINK). In this note, we run through the final decisions and implications for potential UK revenue share.
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