Business
Citi downgrades Nordic telcos over slower earnings growth in Q2, lack of catalysts
Citi downgrades Nordic telcos over slower earnings growth in Q2, lack of catalysts
About this update from Tele2 Ab Class A
** Citi Research sees limited upside for Nordic telcos, citing financial trends and lack of catalysts** It downgrades Swedish operators Telia OMXSTO:TELIA and Tele2 OMXSTO:TEL2_A as well as Norway's Telenor OSL:TEL to ''neutral'', also maintaining a neutral stance on Finland's Elisa OMXHEX:ELISA** While the brokerage deems the groups' underlying topline and EBITDA growth as 'decent' across the board in Q1, it notes it was driven by 2025 cost cutting, and expects a moderation in the EBITDA trend in Q2** Given no in-market consolidation and tougher-than-expected competition in Finland, the stock performance YTD was "less impressive," the brokerage says** It adds that while there is some in-market consolidation optimism in Sweden and Denmark, operators seem to wait for more supportive signals from the regulators** Also, operators may reserve headroom for future M&A, capping shareholder return, Citi notes