Telecom Italia: Jefferies maintains 'buy' after CEO named

(CercleFinance.com) - Jefferies is maintaining its "buy" rating on Telecom Italia, with a target price of 0.
75 euro, while saying that the appointment of CEO Luigi Gubitosi is "no guarantee of value creation."

According to the US broker, it is presumed that Gubitosi - who was backed by Elliott - will endorse the US investment fund's strategic plan, which plans to reduce its stake in the domestic fixed network to 25%-75%.

"Whilst network separation is becoming more likely, implications for shareholder value depend critically on deal terms and the regulatory/competitive conditions," it added.

Although Jefferies acknowledges that Gubitosi's CV suggests expertise in turnaround and political influence, his leverage has to be enhanced by a credible alternative Plan, the broker wrote in its report.

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