Berenberg sees shift to 'defensive growth' for European telecoms
26/06/2025 08:25
** Berenberg predicts transition from "defensive" to "defensive growth" for European telecom stocks as it initiates or re-initiates coverage on 20 companies from the sector ** It sees sustainable free cash flow growth of 10% annually for the sector over 2025-2030, following prolonged period of lacklustre returns and underperformance vs the wider market ** The broker expects that savings in capital expenditure and operating expenditure will boost earnings, with gross capex and opex expected to fall by 5 billion euros and 2.5 billion euros per year respectively over 2025-2030 as telecoms operators complete their fibre/5G network roll outs and shut down copper/PSTN ** It prefers European telecoms stocks that create value for investors, deliver positive cash returns momentum and screen as "relatively cheap" vs the sector ** The broker's top picks include BT Group BT.L, Deutsche Telekom DTEGn.DE, Cellnex CLNX.MC, Telecom Italia TLIT.MI, SES SESFg.LU, Zegona ZEG.L and Proximus PROX.BR, which it expects to offer the most upside for investors
| COMPANY | RATING | PT |
|---|---|---|
| Proximus | BUY | EUR 11.10 |
| Sunrise Communications | HOLD | CHF 49.00 |
| Telecom Italia (Ords) | BUY | EUR 0.52 |
| Telecom Italia (Savs) | BUY | EUR 0.52 |
| Zegona | BUY | GBP 1,000 |
| BT Group | BUY | GBP 2.40 |
| Cellnex Telecom | BUY | EUR 46.00 |
| Elisa | BUY | EUR 54.00 |
| INWIT | BUY | EUR 12.30 |
| KPN | BUY | EUR 4.78 |
| Orange | BUY | EUR 15.00 |
| SES | BUY | EUR 9.60 |
| Liberty Global | HOLD | USD 11.00 |
| Swisscom | HOLD | CHF 569.00 |
| Tele2 | HOLD | SEK 125.00 |
| Telefonica | HOLD | EUR 4.30 |
| Telenor | HOLD | NOK 138.00 |
| Telia Company | HOLD | SEK 30.00 |
| Vodafone | HOLD | GBP 0.80 |