JPM sees 'break-out year' for European telcos

Onward Technologies

21/03/2023 11:54

** J.P.Morgan says 2023 could be a "break-out year" for
European telecommunications companies, citing a number of
positive catalysts 
    ** The brokerage sees sector revenue growth continuing
upwards, following recent retail price hikes, with scope to end
2023 at above 2%
    ** It notes that the European telecoms sector is up 12%
year-to-date versus 4% for the wider market, and highlights
"strong" Q4 sector results
    ** It sees signs of a peak in capex, with fibre builds
coming to an end, and says sector cash flow can grow a
cumulative >60% mid-term
    ** Falling energy prices could also drive 2024 earnings
upgrades as companies' energy costs drop, the brokerage says 
    ** The brokerage sees above 40% potential target price
upside for BT  BT.L , Cellnex  CLNX.MC , OTE  OTEr.AT , Bouygues
 BOUY.PA , Deutsche Telekom  DTEGn.DE , and INWIT  INWT.MI 
    ** It makes its largest upwards EBITDA forecast changes for
INWIT (+5%) and Telenet  TNET.BR  (+3%), and downwards for SES
 SESFd.PA  (-4%) and Tele2  TEL2b.ST  (-3%)
    ** It cuts its target price by 17% for Telenet to EUR 19.0
and by 15% for Tele2 to SEK 120.0, while it raises Inwit by 14%
to EUR 15.2


 (Reporting by Greta Rosen Fondahn)
 ((Greta.RosenFondahn@thomsonreuters.com))