JPM sees modest impact of rising rates, credit spreads on European telcos
29/06/2022 06:48
** JPMorgan says that while rate hikes and widening credit
spreads might be seen as a risk for telcos, which are heavily
levered, its research suggests otherwise
** It says the sector's near-term debt refinancing needs and
cost are modest
** The broker notes the wider equity market sell-off,
coupled with rising deal funding costs, may dampen M&A deal flow
** If market challengers face sustained credit and
inflationary pressures, it may catalyse select market repair,
JPM adds
** It cuts to "neutral" from "overweight" Britain's Vodafone
VOD.L on German headwinds and fading M&A hope, Swisscom
SCMN.S as defensive credentials are now well reflected in the
shares, and Telekom Austria TELA.VI on its CEE exposure
** JPM cuts to "underweight" from "neutral" Portugal's NOS
NOS.LS on new entrant risks, and Germany's Vantage Towers
VTWRn.DE saying its valuation premium is unjustified
** The broker's top picks are Britain's BT BT.L , Spain's
Cellnex CLNX.MC and Deutsche Telekom DTEGn.DE , all rated
"overweight"
(Reporting by Elena Vardon)
((elena.vardon@tr.com))