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Organic Q1 revenue growth was in line with expectations at 3.2% yoy, while EBITDA was up by only 2.1% yoy and lfl due to a significant increase in the cost of energy and the higher growth in lower margin revenue in Spain. EBITDA less capex was however good, up by 6.4% yoy due to a 4.9% decline in capex. The dividend yield is 6.45%, above the 4% for the sector best in class: we maintain our Buy.
Companies: Telefonica SA
Q3 was globally in line with expectations. Things are still tough in Spain but Germany is a very strong asset while Brazil and the UK are deploying fibre networks which should bear juicy fruits in the future. Hispam operates as an autonomous company which could soon be sold as a whole or piecemeal. Our significant upside is commensurate with the incredibly low levels reached one year ago. The stock has partly recovered but is still 35% under its pre-COVID-19 levels.
The Q2 numbers are slightly better than expected. Telefonica has also upgraded its outlook for 2021. The dividend cut of last year, the recent sale of its telecommunications towers division in Europe and in Latin America for €7.7bn to American Tower, the merger with Virgin in the UK, the reduction in net debt and a quite correct H1 performance should indeed help restore market confidence. We maintain our opinion at Buy on the stock.
Q4 numbers were in line with expectations and quite reassuring. Telefonica has, however, preferred to cut its dividend by 25% (at €0.3 vs €0.4 previously) to preserve its cash flow while its investments will remain substantial in the coming years. So after the recent sale of its telecommunications towers division in Europe and in Latin America for €7.7bn to American Tower, this cautious cut could indeed help restore market confidence. We maintain our opinion at Buy on the stock.
Telefonica announced this morning that its subsidiary Telxius has signed an agreement with American Tower for the sale of its towers division in Europe for €7.7bn. It’s indeed an impressive price and TEF succumbed logically to the sirens of American Tower to reduce its debt a little more. We maintain our opinion at Buy on the stock.
Telefónica remains on track to deliver its 2020 outlook of flat EBITDA-capex yoy in organic terms but… at constant currency. The Forex headwind is however a storm in Brazil (-30% yoy). The stock is trading at a 55% discount to its February level. The dividend yield is nearly 15% reflecting the market’s major concern about its sustainability. Even if the group ends up lowering its dividend due to this Forex storm… we maintain our Buy opinion.
A poor Q2 performance for Telefonica although this had been expected given, in particular, the double penalty linked to the South American currency weakness vs the Euro (in particular the Brazilain Real) during the pandemic. For 2020 Telefónica nonetheless remains on track to deliver a slightly negative to flat EBITDA-capex yoy in organic terms but… at constant currency. The key point thus remains that the 2020 dividend is confirmed at €0.40.
The Q1 is in line with our expectations. Telefonica’s revenues could decrease by 5% in 2020, exceeding the top range of our own estimates of the COVID-19 impact on a telco’s account but this is due to the recent steep decline of South American currencies. As capex should decline like EBITDA, cash flows are not in danger and the group confirmed its dividends. The creation of a JV bringing together Virgin and O2 is strategically and fundamentally a good deal.
Telefonica has approved a 5-point plan which is supposed to mark a new era for the company. The key point seems the focus on the four markets which represent today 80% of Telefonica’s business and where the group is a solid leader. In parallel, the operational spin-off of Hispanoamerica seems to show the group’s willingness to disengage at term from these activities. It’s a very interesting perspective on the long term. We maintain our Strong Buy on the stock.
Nothing extraordinary about the Q2 release. Q2 revenues were up by 3.7% yoy and lfl, exactly like in Q1, while the adjusted EBITDA has increased in parallel by 1.6%, a number still a little bit weak compared to the revenue growth. It seems that management was indeed quite right to give a cautious guidance for 2019 with both revenue and EBITDA growth of around 2% (and a dividend unchanged).
Q1 globally in line with expectations (with good organic revenue growth of 3.8% but an adjusted EBITDA up by only 1%). At less than 6x its EBITDA and with a current dividend yield of 5.6%, the stock offers some potential but there is no catalyst in the short term.
The group released its Q4 results yesterday which once again were quite good if we leave out of the equation…the negative FX impact. Revenues were up organically by 3% yoy, a quite good number reflecting a slight acceleration compared to the +2.7% and +2% recorded during Q3 and H1. And if, as usual, the reported revenues declined due to the South American FX, it was however less than in the previous quarters as they were eventually down by only 1.9% (vs. -8.3% in Q3 and -6.75 in H1). Q4 EBITDA
A quite correct set of results for Q3 in organic terms but the continued deterioration in the Brazilian real and the collapse of the Argentine peso have severely impacted the reported accounts. This is still limiting any real recovery of the stock. Note, however, that the Argentine business which represented 6.5% of Telefonica’s business a year ago now represents only 2%. NB The Brazilian real is currently up by 15% from its lows of September. We maintain our Add recommendation.
A quite correct set of results for Q2 but the continued deterioration in South American currencies against the euro is still limiting any real recovery of the stock. We maintain our Add recommendation on the stock with an 11.5% upside.
Once again an as expected set of results for Q1 if we leave out of the equation…the negative forex impact. Revenues were up organically by 2% yoy, a number which is in line with the growth recorded during the first 9 months of 2017 but slightly below the good 4.8% recorded in the previous Q4. Note also that, excluding the impact of regulation, revenues would have risen by 3.1% yoy. But the reported revenues were eventually down by 7.2% due to the strong depreciation of South American currencies
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A correct release globally in line with expectations (slight slowdown in revenue growth in Q4 but a slightly better than expected FCF for the full year) but the outlook given by management for 2022/23 is quite cautious (this is the upper range of the guidance which corresponds to our estimates). We maintain our opinion at Buy. Note, however, the CEO Nick Read is rather under fire after missing opportunities in Italy (Iliad), Spain (Orange-Masmovil merger) and with Vantage.
Companies: Vodafone Group Plc
e client of Hybridan LLP Dish of the day Joiners: BSF Enterprise. Following the successful reverse takeover of 3D Bio-Tissues Limited, a tissue engineering business based in Newcastle, UK, the Company announces admission of the enlarged group to the standard segment of the Official List and initiation of trading on the Main Market under the ticker ' BSFA '. The Admission follows a placing which raised £1.75m at a placing price of 7.37 pence per share. Leavers: No Leavers Today. What’s cooking in
Companies: VANL TYM ACSO CCS FNTL SOLI TRAC ECK KIBO OSI
Gamma has today issued a Q1 trading update, coinciding with its AGM. The update confirms that the year has started positively, with revenue growth across all operating segments. Management expects this positive momentum to continue throughout the year, with full-year adjusted EBITDA and adjusted EPS being in the upper half of market estimates. We have tweaked our FY22 revenue estimate down (£495m to £488m) but left our earnings figures intact.
Companies: Gamma Communications PLC
Companies: GHH IGP IOM KBT QXT SRT
Companies: ARB FNX PEB QXT TRI
Verizon gave a decent performance in the last quarter with a 3.9% growth of the service revenue and also a growth in earnings. Its performance was supported by a robust net addition in broadband and wireless, both translating to the growth of the bottom line. Third parties such as JD Power and RootMetrics continue to recognize Verizon as the best network experience. The company received great momentum on the consecutive front, in the adoption of 5G, with more than 25% of its consumer phone base
Companies: Verizon Communications (VZ:NYSE)Verizon Communications Inc. (VZ:NYS)
Friday's market sell off saw some violent downward moves in many stocks with little initial differentiation between sectors or the key drivers of businesses, creating significant share price drops in a number of higher quality or uncorrelated names. We take a look at some stocks we believe have either seen an unwarranted sell-off, have seen weakness go under the radar or where there is now a more attractive opportunity.
Companies: ANX IBPO CYAN SOM EQT AFM
The list of the headwinds impacting Nokia’s first quarter is long and it might have seemed reasonable to assume that the financial figures would be soft. However, Nokia delivered a strong beat in all financial metrics for its first quarter report, and we believe it is well set to reach the high-end of its FY22 guidance.
Companies: Nokia Oyj
Apple has reported another strong financial performance with a strong growth in subscriptions. Home and accessories, wearables, Mac, and iPhone, had a particularly strong performance over the past year. With Apple silicon, leaps and bounds have been seen in efficiency and performance. Last month Apple announced another breakthrough with yet another powerful chip for a PC named M1 Ultra. The company has also expanded its iPhone offerings, adding up two very pretty green finishes to the iPhone 13.
Companies: APPLE (AAPL:NYSE)Apple Inc. (AAPL:NAS)
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