BofA sees headwinds for European telecoms in Q3, but better Q4
14/08/2024 14:28
** Bank of America expects headwinds to persist for European
telecoms in the next three months, while it signals a better end
to the year
** "Capex trends net positive but pricing becoming less
stable, watch closely," BofA says
** Says domestic service revenue trends across European
telecom sector slowed in Q2, expects further slowdown in Q3, a
drop to below 1%, and then a rebound to above 1% in the last
quarter of the year; for 2025, it sees growth of +1-2%
** BofA also sees 0.8% EBITDA recovery in the third quarter,
followed by a further improvement to +1-2% in the last three
months of 2024 and, finally, +2% growth in 2025
** It remains positive on Deutsche Telekom DTEGn.DE ahead
of its October's Capital Markets Day with a positive outlook for
cash returns, but cuts rating on Spain's Telefonica TEF.MC on
FX concerns related to Brazil weakness
** BofA has also recently upgraded Norwegian telecom
operator Telenor TEL.OL , and continues to like mobile retailer
and service provider Freenet's FNTGn.DE TV opportunity
** It has also confirmed Telecoms group Swisscom's SCMN.S
Q2 challenges, below-consensus FCF for Swedish telecom operator
Telia TELIA.ST , and limited visibility for Belgian telecoms
company Proximus PROX.BR
(Reporting by Jakub Olesiuk)
((jakub.olesiuk@thomsonreuters.com))