Iliad: Bryan Garnier still a buyer; targets 205 euros
(CercleFinance.com) - Bryan, Garnier & Co.
this morning reviewed Iliad, the parent company of the alternative telecom operator Free, which was battered in the market yesterday following disappointing results.
However, analysts are not despairing, maintaining their buy rating on the share, albeit cutting their target price for the share by just over 10% from 230 euros to 205 euros, which still suggests upside potential of around 50%.
The Iliad share lost almost one fifth of its value yesterday on the Paris Stock Exchange after the group's announcement of disappointing quarterly sales, which were marked by losses in the number of fixed telephony users between January and March. In addition to a management reshuffle, Iliad has announced a commercial plan to win back users that is particularly focused on the very high speed broadband, in order to renew growth.
Analysts say they are not convinced about steps taken to win back market share that have been announced by Iliad, which appear to be "late" and raise questions about the group's agility. This is particularly so as - whether the group has new management or not - the French market remains difficult, and that starting up in Italy will require costs to do so. However, Bryan Garnier believes that Free will "hit hard" in France - particularly in terms of its mobile offering.
Admittedly, the crash in Iliad's share price is not unlike that of Altice in November 2017, although these two companies are in completely different situations. Iliad's annual EBITDA growth is expected to be 6.7% between 2017 and 2020, outperforming that of the sector (around 2%). In addition, Iliad is able to mobilise certain catalysts to recover: Italy, new "disruptive" internet boxes, and since yesterday "imminent" changes in its landline and mobile offers.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.
this morning reviewed Iliad, the parent company of the alternative telecom operator Free, which was battered in the market yesterday following disappointing results.
However, analysts are not despairing, maintaining their buy rating on the share, albeit cutting their target price for the share by just over 10% from 230 euros to 205 euros, which still suggests upside potential of around 50%.
The Iliad share lost almost one fifth of its value yesterday on the Paris Stock Exchange after the group's announcement of disappointing quarterly sales, which were marked by losses in the number of fixed telephony users between January and March. In addition to a management reshuffle, Iliad has announced a commercial plan to win back users that is particularly focused on the very high speed broadband, in order to renew growth.
Analysts say they are not convinced about steps taken to win back market share that have been announced by Iliad, which appear to be "late" and raise questions about the group's agility. This is particularly so as - whether the group has new management or not - the French market remains difficult, and that starting up in Italy will require costs to do so. However, Bryan Garnier believes that Free will "hit hard" in France - particularly in terms of its mobile offering.
Admittedly, the crash in Iliad's share price is not unlike that of Altice in November 2017, although these two companies are in completely different situations. Iliad's annual EBITDA growth is expected to be 6.7% between 2017 and 2020, outperforming that of the sector (around 2%). In addition, Iliad is able to mobilise certain catalysts to recover: Italy, new "disruptive" internet boxes, and since yesterday "imminent" changes in its landline and mobile offers.
Copyright (c) 2018 CercleFinance.com. All rights reserved.
The information and analyses distributed by Cercle Finance are only intended as decision-making support for investors. Cercle Finance's responsibility may not be entailed, either directly or indirectly following the use of such information and analyses by readers. Any non-professional investor is recommended to consult a professional advisor before making any investment decision. This indicative information in no way constitutes any invitation to sell or buy securities.