Nomura Securities Reiterates a 'Reduce' on France Telecom (FTE); Revisit Views Ahead of FY Report
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Price: $9.45 --0%
Rating Summary:
2 Buy, 5 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 20
Rating Summary:
2 Buy, 5 Hold, 5 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 18 | New: 20
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Nomura Securities reiterates a 'Reduce' on France Telecom (NYSE: FTE), PT lowered from EUR14.0 to EUR13.30.
Analyst, Frederic Boulan, said, "Our cautious stance is based on a combination of earnings, guidance and dividend risk, coupled with lack of valuation support. We believe some of those risks are better priced in, with continued declines in estimates (we don’t think 2012 guidance will disappoint), and a better flagged dividend risk (drop of the mid-term plan, which underpins the long-term dividend commitment, may trigger a dividend cut post 2012, while we think the fiscal 2012 payout mix could be revised to include share) with one third of analysts now forecasting a cut post 2012. However, we continue to see risks to long-term forecasts and to domestic ROCE prospects post Iliad’s aggressive launch and incumbents’ over-reaction. We fine-tune our numbers to reflect recent newsflow and FX moves leading to small cuts in EPS. For now we don’t change our assumptions in domestic mobile significantly – we assume slightly higher subscriber losses, but this is largely offset in 2012 by higher roaming income from Iliad. In terms of valuation, the stock is getting cheaper at 13% 2012E FCFE, vs. the sector at 12%, but we need to see a larger discount before turning buyers."
For an analyst ratings summary and ratings history on France Telecom click here. For more ratings news on France Telecom click here.
Shares of France Telecom closed at $15.19 yesterday.
Analyst, Frederic Boulan, said, "Our cautious stance is based on a combination of earnings, guidance and dividend risk, coupled with lack of valuation support. We believe some of those risks are better priced in, with continued declines in estimates (we don’t think 2012 guidance will disappoint), and a better flagged dividend risk (drop of the mid-term plan, which underpins the long-term dividend commitment, may trigger a dividend cut post 2012, while we think the fiscal 2012 payout mix could be revised to include share) with one third of analysts now forecasting a cut post 2012. However, we continue to see risks to long-term forecasts and to domestic ROCE prospects post Iliad’s aggressive launch and incumbents’ over-reaction. We fine-tune our numbers to reflect recent newsflow and FX moves leading to small cuts in EPS. For now we don’t change our assumptions in domestic mobile significantly – we assume slightly higher subscriber losses, but this is largely offset in 2012 by higher roaming income from Iliad. In terms of valuation, the stock is getting cheaper at 13% 2012E FCFE, vs. the sector at 12%, but we need to see a larger discount before turning buyers."
For an analyst ratings summary and ratings history on France Telecom click here. For more ratings news on France Telecom click here.
Shares of France Telecom closed at $15.19 yesterday.
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