Deutsche Telekom
Note: This is a daily stock update and the information stands true as of 10/10/24, 09:00 CET.
Company Update:
Expert Opinion:
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Company Update:
Deutsche Telekom released some guidance (24 up to 27) ahead of its Capital Market Day today.
The company expects CAGR to reach 4% for sales 4% (vs 3% in our numbers) and 4-6% for EBITDA level (we had 4%) on average between 24 and 27.
EPS CAGR will stand at c 10% leading to an EPS27 to €2.5 which is substantially higher than what we had in our mind.
The payout ratio will remain above 50% (50-60%) leading to higher dividend than expected.
DVD 24 is set at €0.97, above our 80 cents estimated.
Furthermore, Deutsche Telekom announces a €6-7bn share buyback program over the 24-27 period.
Expert Opinion:
Our reduce rating is predicated on the limited upside. However, momentum continues to be strong and we will revise up our numbers and dividend yield will rise.
This is probably the safest play in telecoms in Europe thanks to its exposure to the US market which remains dynamic. Valuation remains a bit rich for the sector but it is a must-have stock for any fund focusing on dividend. In our coverage, Orange could also be interesting. The French budget will be unveiled today and the increased tax rate will hurt Orange. However, we believe its is already largely priced in and with a PE below 9x and a dividend yield of c7.5%, I like Orange at these levels.
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