Telecom: another disaster. Brokers explain why and say buy


Another terrifying session for Telecom Italia which today continued to roll in Piazza Affari, moving in sharp contrast with the Ftse Mib.

Telecom Italia: new defeat one step away from historic lows

After closing yesterday’s session with a drop of over 8.5%, the stock also fell under the focus of sales today.
Telecom Italia has completed trading on the intraday lows at 0.32 euros, with a sinking of 7.86% and explosive trading volumes, given that at the end of the session over 380 million shares transited on the market, more than triple the monthly average equal to about 120 million pieces.

The bearish fury on Telecom Italia, which started yesterday after the presentation of the results of the first quarter and which is pushing the quotations one step away from the historical lows updated on March 16th to 0.2861 euros, does not stop.

Telecom Italia collapses after accounts and indications AD

Numbers that disappointed above all with reference to domestic revenues and EBITDA, to which were added the little reassuring indications of the CEO regarding the impact of coronavirus on the accounts, quantified in the order of around 2% -3% of revenues and a little less for Ebitda.

Telecom Italia thus remains under pressure, without finding any benefit in the bullish confirmations that come from many quarters.

Telecom Italia: Equita SIM remains positive. Here because

Commenting on yesterday’s conference call, Equita SIM analysts highlighted that additional elements were lacking to clarify the structural trend of fixed revenues in the first quarter, the area of ​​greatest concern, and the projections of the second, probably also for the limited datapoints on the recovery of the post lockdown business.

The Milanese SIM substantially confirms its estimates for the whole year and maintains a positive view on Telecom Italia, with a “buy” recommendation and a target price of 0.47 euros.

Despite the weakness in the first quarter, Equita SIM analysts think that the TLC business may be among the most resilient in a scenario of slow economic recovery, given the structural demand for connectivity.

Secondly, the confirmation of the guidance of EBITDA-CAPEX and free cash flow indicates efficiency spaces on operating expenses and investments that can be activated in the short term and the management reiterated the strong commitment to the EBITDA target.

In addition, the chances of an integration of the fixed network have increased according to the Milanese SIM, given the clear political will in support of the project.

In this sense, analysts also read the news of the willingness of Open Fiber shareholders to support the upgrade of the network coverage plan with new equity, which allows you to sit at a negotiating table in a position of greater strength.

Telecom Italia: Bca IMI and Bca Akros are also bullish

Meanwhile, Banca IMI is also betting on Telecom Italia, which today reiterated the “buy” recommendation, with a target price of 0.62 euro.

Analysts still see the group’s business under pressure in the coming months, but at the same time believe that any extraordinary operations should help free up the value of the assets.

Nor does Banca Akros change its strategy, which renews the invitation to buy Telecom Italia, with a fair value of € 0.65, after additional expert indications did not arrive from the conference call.

Telecom Italia: Mediobanca is worth more than double

The colleagues of Mediobanca Securities, on the other hand, let them know that they are reassured by the tones used yesterday by the CEO Gubitosi, pointing the accent on the good results that Telecom Italia is achieving in terms of cash generation and debt reduction.

According to Mediobanca, the collapse accused by the share is attributable to the suspension of the ban on short selling, believing that the Ebitda lower than estimated in the face of a better cash generation of the same cannot justify such a market reaction.

Mediobanca also reiterates its bullish strategy on Telecom Italia, with a “buy” recommendation and a target price of 0.68 euros, which implies an upside potential of approximately 112% with respect to current market prices.

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