Deutsche Bank Upgrades Rostelecom (ROS) to Hold; Comments on Russian Telecoms

June 24, 2009 7:48 AM EDT

Deutsche Bank upgrades Rostelecom (NYSE: ROS) to Hold. Price target $7.05.

Deutsche analyst says, " We expect major changes in the sector in the next few years, and see
significant execution and regulatory risks. We think VimpelCom (NYSE: VIP) could do better operationally, as it started its transformation earlier. Although shareholder risks may weigh on VimpelCom, it remains our top pick with a new target price of USD15. Amongst Sistema's affiliates, we rate MTS a Buy (USD46.75), maintain a Hold on Comstar (USD4.55) and reiterate Hold on Sistema (USD12.90).

"We raise our mobile revenue estimates for MTS and VimpelCom as we upgrade our subscriber base estimates, Ukrainian hryvnia forecast and VimpelCom's fixed-line revenue estimates. We raise our EBITDA margin for VimpelCom by 2ppt following strong 1Q09 results. We also lowered our depreciation and net interest forecast, leading to higher earnings estimates. We upgrade Rostelecom's revenues, EBITDA and earnings forecast following better-than-expected 2008 numbers. For Sistema, we reflected changes in our MTS and Comstar models, included Bashkir energy companies and excluded Sistema Hals."

Rostelekom OAO (Rostelecom) is a Russia-based telecommunications services provider and carrier of domestic long distance (DLD) and international long distance (ILD).

Related Categories

Upgrades

Stocks Mentioned

Related Entities

• Deutsche Bank

Add Your Comment

Name

Subject

Body

Verification can't see the text?
click here to refresh the image.
what's this?