Investor Alert

March 5, 2019, 7:24 a.m. EST

French telecoms fall after Barclays downgrade

Watchlist Relevance

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

or Cancel Already have a watchlist? Log In

By Patrick Costello

Shares of French telecoms companies fell Tuesday after Barclays downgraded the sector and cut its estimates and target prices over a more cautious outlook.

The British bank says the French telecoms market is in need of prolonged repair after an "irrational" level of promotional activity in 2018 lowered market return on capital employed, or ROCE, in the sector to 5%.

While the competitive environment has improved since the third quarter of 2018, "sustained discipline" on the part of French telecoms companies remains uncertain, Barclays says.

"In-market consolidation is the best option, we believe, but appears unlikely short term," Barclays says, adding it adopts a more cautious view on the sector's trends for 2019.

At 1111 GMT, shares of Altice Europe NV (ATC.AE) traded 9% lower at 1.88 euros ($2.13), and Iliad SA (ILD.FR) was down 2.2% at EUR91.26. Bouygues SA (EN.FR) traded 0.7% lower at EUR32.61, while Orange (ORA.FR) was up 0.7% to EUR13.41.

Barclays downgraded Orange and Iliad to equalweight, slashing its target price for Orange to EUR16.50 from EUR18.50 and Iliad to EUR105 from EUR145.

Barclays downgraded Altice to underweight and cut its target to EUR1.50 from EUR2.80, saying it estimates that the share price factors in "substantial M&A."

The bank maintained its equalweight rating for Bouygues, noting "solid momentum" is priced into the share, but it cut its target price to EUR37 from EUR39.

This Story has 0 Comments
Be the first to comment
More News In

Story Conversation

Commenting FAQs »

Partner Center

Link to MarketWatch's Slice.