Telia Earnings: Shares Up 9% After 8% Growth in EBITDA; Maintain Our SEK 29 Fair Value Estimate

Shares of narrow-moat Telia are up 9% at the time of the writing due to a strong EBITDA development in the third quarter and a slight increase in 2023 guidance. Service revenue grew by 2.6% organically, which translated into 7.6% organic growth in EBITDA thanks to operating leverage and lower energy expenses. All geographies contributed to EBITDA growth and the standouts Finland, Norway, and the Baltics had double-digit growth. Price increases coupled with lower energy expenses were the main drivers of profit growth. In Sweden, which represents 40% of the group’s revenue, EBITDA grew by 4% due to service revenue growth of 2.2% and mix improvements. We maintain our SEK 29 fair value estimate, with shares trading at around SEK 26 after the 9% increase.