Telefonica Deutschland Holding AG Equity Research & Stock Reports

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26 Jul 23

Recent correction a buying opportunity

EBITDA was slightly better than expectations, up by 2.7%, the margin having contracted by only 0.5ppt yoy. Capex was also lower than expected, down by 11.4% yoy. The group has confirmed quarter after quarter that it has entered a virtuous circle of EBITDA growth accompanied by falling Capex for the coming years. With a secure dividend of €0.18 the group currently offers a 7.2% dividend yield. This reflects an undeserved depressed level for the share price and we are again at Buy (vs Add one mo

Companies: Telefonica Deutschland Holding AG

AlphaValue

10 May 23

Solid Q1 but the stock has already rallied 50% from its October lows

Q1 revenue growth was above our expectations while EBITDA grew by less than revenue due to strong growth of low margin handset sales and higher energy costs. Capex was however lower than expected and the group confirmed that it has entered a virtuous circle of EBITDA growth accompanied by falling Capex. We remain at Add on the stock despite the only limited upside as it offers a 5.75% dividend yield which is nearly worthy of the sector best-in-class.

Companies: Telefonica Deutschland Holding AG

AlphaValue

03 Nov 22

A Q3 confirming that the dividend is not at risk

The solid Q3 numbers confirmed the good performance for the H1. Besides this, capex should start to decrease from the next quarter. The group is now entering a virtuous circle of EBITDA growth mixed with falling Capex in the coming years. At mid-October TEF Deutschland’s share price had declined by 25% in less than two months, leaving its dividend yield at 9% (vs 7% last summer). We are at Buy on the stock which recovered by 7.5% last week.

Companies: Telefonica Deutschland Holding AG

AlphaValue

27 Jul 22

Still an undeserved discount compared to the best in class telcos

The relatively strong start to the year recorded in Q1 continued in Q2. The group has slightly increased its 2022 EBITDA outlook and raised its 5G coverage ambition by the year end within an unchanged capex envelope. We remain at Add on the stock which, like most telcos, was sold off last week in what might be termed a rotation into quality growth stocks at the expense of telcos (telcos having been up ytd 2022).

Companies: Telefonica Deutschland Holding AG

AlphaValue

11 May 22

Well on track to become a regular dividend slight growth story

A quite strong start to the year with revenues and EBITDA up by 5.2% and 7.2% yoy and lfl respectively. The group is accelerating its 5G rollout to a full coverage by 2025. It has already achieved coverage of 40% at the end of April. As icing on the cake, investments which had shifted from 2020 to 2021 due to the COVID-19 should decline a little in 2022 and allow the dividend to increase steadily in the coming years. We maintain our opinion at Add.

Companies: Telefonica Deutschland Holding AG

AlphaValue

03 Nov 21

Still investing in 5G but returning to growth

A solid Q3 release with revenues and EBITDA up by 5.1% and 3% yoy and lfl respectively. EBITDA is now expected to grow by a low to mid-single digit (vs a slightly positive growth previously). Like for many telcos, due to the pressure on rates and therefore on the dividend yield, the stock is currently at the low end of its trading range (€2.2-2.5). It’s probably a good time to buy to aim for a return to the top of the range.

Companies: Telefonica Deutschland Holding AG

AlphaValue

28 Jul 21

Return to normalcy and outlook slightly raised

A solid Q2 release with revenues and EBITDA up by c.3.5% yoy and lfl respectively (note travel restrictions are still limiting roaming activities). The stock is still trading 5% below its pre-COVID-19 levels: this is undeserved and we maintain our Buy opinion. The dividend yield is 7.35% and remains very sure according to us.

Companies: Telefonica Deutschland Holding AG

AlphaValue

12 May 21

An investment phase that weighs on the stock

In a hard lockdown quarter, Q1 revenues were flat yoy, while EBITDA was better than expected, up by 5.5% despite the roaming drag. The stock is still trading 5% below its pre-COVID-19 levels: this is undeserved and we maintain our Buy opinion. The dividend yield is 7.35% and remains very sure according to us (and is calibrated according a capex/sales ratio peak at 17-18% in 2021-22).

Companies: Telefonica Deutschland Holding AG

AlphaValue

24 Feb 21

An enhanced dividend but still high capex for 2021-22

The group published a solid quarter with, in particular, a return to a solid 3.2% growth for EBITDA despite still weak roaming. The group announced an enhanced dividend of €0.18 (vs €0.17 expected) for 2020. The stock is, however, still trading 15% below its pre-COVID-19 (and last summer) levels: this is undeserved and we maintain our Buy opinion, given its secure 7.7% dividend yield.

Companies: Telefonica Deutschland Holding AG

AlphaValue

28 Oct 20

A positive quarter for a good defensive stock

The stock was up by 1% at the opening (in a market worried about the return of lockdowns and down by 3% overall) following the Q3 release. This is deserved as the group published a solid quarter with, in particular, a return to growth for EBITDA despite still-weak roaming. The stock is, however, still trading 15% below its February (and May!) levels: this is undeserved and we maintain our Buy opinion.

Companies: O2D O2D TELDF O2D O2D

AlphaValue

29 Jul 20

A 7% dividend yield which should be more coveted

The stock was down 5% at the opening following its Q2 release. This is not deserved as the group published an as expected quarter. The key point to keep in mind is that, since the announcement of the decline in its dividend last December (due to an upcoming two-year investment project), the dividend is perfectly in line with the group’s cash flows. Well, with a 7% dividend yield, we believe the stock is rather a good opportunity to take.

Companies: Telefonica Deutschland Holding AG

AlphaValue

04 Nov 19

An interesting and not expensive slight growth story ?

Q3 revenues were up by 2.7% yoy showing that, despite the decline on the fixed side, the group is clearly an interesting slight growth story in the telecom sector. Admittedly, EBITDA was up by only 0.9% yoy and lfl but the current four-year transformation programme of the group should bear fruit mainly from 2020. We maintain our Buy on the stock, although we are aware that the group could partly cut its dividend for 2019 in the next release.

Companies: Telefonica Deutschland Holding AG

AlphaValue

09 May 19

A Q1 globally in line and a good agreement with Vodafone

Q1 in line with expectations with revenues and EBITDA up, respectively, by 1.3% and 1% yoy. But thanks to an agreement signed two days ago with Vodafone, Telefónica Deutschland will be able to supply up to 24m cable households in Germany with attractive O2 fixed network products at higher speeds than VDSL. This is clearly a new growth driver. With a current dividend yield at 9.45%, we still believe the group is discounted compared to its peers.

Companies: Telefonica Deutschland Holding AG

AlphaValue

25 Jul 18

Still a very attractive dividend yield

Q2 and H1 revenues were perfectly stable yoy as expected excluding a regulatory drag of -0.5%. H1 EBITDA was up by 4% yoy and lfl (+6% in IFRS 15) thanks to an additional €30m of relevant synergies. EBITDA is indeed slightly above our expectations Management has reiterated its full-year outlook for 2018: revenues should remain broadly stable yoy excluding a regulatory drag (for European roaming in H1) of €30-50m corresponding to only 0.5% of the global revenues of the group. EBITDA should also

Companies: Telefonica Deutschland Holding AG

AlphaValue

21 Feb 18

An attractive dividend yield at 6.4%

With a dividend yield of 6.4% (at yesterday’s price), well above its peers (at 5.5% on average but at 4.5% for some secure regional players like Swisscom, Tele2 or Elisa), there is an interesting opportunity to invest in a stock which is probably a no-growth story for 2018 but which does not present any risk of not paying its dividend!

Companies: Telefonica Deutschland Holding AG

AlphaValue