UBS downgrades Tele2, cites dividend risks amid bleak outlook

Telenor ASA

10/01/2025 10:05

** UBS cuts Tele2  TEL2b.ST  to "sell" from "neutral",
saying the Swedish telecom operator is unlikely to cover its
dividend or reach the cash flow consensus
    ** The broker expects slowing growth in connectivity service
revenues, shutdown of legacy TV and clarity on tax issues in the
next few quarters to prompt FCF consensus downgrades
    ** In Q3, Tele2 reported an increase in tax paid due to SEK
130 million ($12 million) of withheld tax payment
    ** UBS expects further rating and consensus downgrades
before Tele2's longer-term prospects become more promising
    ** It prefers Nordic peers Telenor  TEL.OL  and Telia
 TELIA.ST , citing their stronger momentum and scope for
consensus upgrades
    ** Out of 23 analysts covering Tele2, nine rate the stock
"strong buy" or "buy", 12 "hold" and two "sell"

($1 = 11.1391 Swedish crowns)

 (Reporting by Vera Dvorakova)
 ((vera.dvorakova@thomsonreuters.com))