Telefónica reported a 0.9% year-on-year increase in revenue in the first quarter of the year, mainly driven by strong service revenue growth of 2.3%. EBITDA grew by 1.9% year over year thanks to revenue growth and control of operating expenses, which just increased by 0.5%. Shares have run by 20% since the lows recorded in February. We are maintaining our EUR 4.90 fair value estimate.
Telefonica is executing the right strategy by selling assets and simplifying its corporate structure, which should be a spark for unlocking value.
It will still take years until Telefonica reshapes its portfolio and reduces debt, as telecom deals move slowly and are usually subject to deep regulatory scrutiny.
|
Metric
|
TEF
|
VOD
|
ORAN
|
|---|---|---|---|
Price/Earnings (Normalized) | 11.71 | 19.17 | 11.29 |
Price/Book Value | 1.02 | 0.41 | 0.88 |
Price/Sales | 0.58 | 0.67 | 0.65 |
Price/Cash Flow | 2.04 | 1.71 | 2.39 |
|
Metric
|
TEF
|
VOD
|
ORAN
|
|---|---|---|---|
Quick Ratio | 0.83 | 0.86 | 0.68 |
Current Ratio | 0.91 | 0.89 | 0.83 |
Interest Coverage | 0.38 | 5.22 | 3.80 |
|
Metric
|
TEF
|
VOD
|
ORAN
|
|---|---|---|---|
Return on Assets (Normalized) | −0.27% | 1.87% | 2.84% |
Return on Equity (Normalized) | −1.23% | 4.81% | 9.89% |
Return on Invested Capital (Normalized) | 2.74% | 3.75% | 9.61% |
|
Ticker
|
Name
|
Morningstar Rating for Stocks
|
Capital Allocation
|
Economic Moat
|
Market Cap
|
|---|---|---|---|---|---|
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