Caution warranted beyond Q2 in Swedish mobile, Berenberg says

Tele2 AB

05/07/2024 11:25

** While Berenberg expects Q2 results to be strong for
Swedish telecoms Telia  TELIA.ST  and Tele2  TEL2b.ST , with
full-year guidance likely to be narrowed towards the upper end,
it remains cautious beyond
    ** The brokerage says that its latest May consumer survey
raises some hard questions about the optimism implied in
consensus mobile service revenue growth forecasts beyond 2024
    ** It adds the above is more of an issue for Tele2, which it
downgrades to "sell" from "hold" than for Telia, keeping "hold"
on the stock
    ** The broker sees Q2 to likely be strong for Tele2 as it
benefits from overlapping contributions of price increases
implemented on the mobile back-book in June 2023 and March 2024
    ** Regarding Telia, it sees the company's service revenues
trending weaker in Q2, outside Sweden, and the broker is
cautious on Sweden into 2025
    ** Berenberg adds, however, that a strong rebound in
profitability in the more cyclical TV business is certain for
Telia now that the company has exited the Champions League,
making the high near-term valuation more defendable
    


 (Reporting by Marta Frąckowiak)
 ((marta.frackowiak@thomsonreuters.com))