JPMorgan has downgraded Finnish telecom operator Elisa to underweight from neutral, citing weakening mobile revenue trends and intensifying competition in Finland, according to an analysis reported by Investing.com.
The price target remains unchanged at 39 euros, implying a downside risk of approximately 10 percent.
The bank highlights rising churn rates and pricing pressure from new low-cost entrants, which is expected to dampen growth to around 1.5 percent during the first half of this year.
Meanwhile, earnings growth is projected to significantly lag the sector average, with cash flow expected to remain flat.
Within the sector, the bank prefers Telia and Tele2, where higher shareholder returns are anticipated through buybacks and dividends.
Tele2 is forecasted to deliver particularly strong dividend growth, while Telenor is viewed as fairly valued with limited growth potential.
Tele2 AB is one of the largest European telecommunications operators. Net sales break down by activity as follows:
- end-user telecommunications services (73.7%): fixed and mobile telephony, Internet access, data transmission and cable television transmission services;
- sale of communication equipment (18.9%);
- telecommunication services for telecoms operators (7.94%).
Net sales are distributed geographically as follows: Sweden (76.1%), Lithuania (13.7%), Latvia (6.9%) and Estonia (3.3%).
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