BofA says price hikes to ease pressure on European telecoms

Telefonica Deutschland Holding AG

17/07/2023 12:58

** BofA Global Research says European telecoms should show
more resilience in Q2, helped by prices increase, after
"upfront" cost and capital expenditures weighed on free cash
flow (FCF) in the previous quarter
    ** The brokerage expects BT  BT.L  ("buy") to benefit from
price hikes, same as Vodafone Germany ("buy") despite weakness
in its broadband business 
    ** Germany's O2D  O2Dn.DE  ("buy") and its parent Spain's
Telefonica  TEF.MC  ("buy") could raise their forecast as
competitive pressures ease across their domestic markets
    ** For Orange  ORAN.PA  ("underperform"), it expects focus
on commercial trends in France post price hikes and any
commentary around Spanish consolidation
    ** On Proximus  PROX.BR  ("underperform"), it says upcoming
price hikes are key but there's also pressure from wage
increases
    ** Across Nordics, the brokerage sees strong service
revenue/telecom EBITDA for telecom firms, but has questions
about their FCF and leverage
    ** It sees strong prospects in H2 for the Nordic market
    

 (Reporting by Matteo Allievi)
 ((Matteo.allievi@thomsonreuters.com))