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Investing.com - Berenberg initiated coverage on Orange SA (OTC:ORANY) (EPA:ORA) (NYSE:ORAN) with a Buy rating and a price target of EUR15.00 on Thursday.
The research firm described Orange’s fundamentals as "sound but dull," while suggesting the telecommunications company could be on the verge of significant strategic moves that might serve as catalysts for the stock.
Berenberg highlighted Orange’s low growth profile balanced by strong cash flow generation, noting its dividend yield of over 6% remains well covered according to the firm’s metrics, while the company maintains solid gearing despite substantial joint venture commitments.
The firm believes Orange is preparing to "stretch its balance sheet" through potential M&A activity, specifically either participating in a break-up of SFR in the French market or acquiring a majority stake in MasOrange.
"There are many unknowns, but on the right terms, a French deal could be a major catalyst for Orange shares," Berenberg stated in its initiation report, suggesting that while current operations may lack excitement, upcoming strategic decisions could significantly impact the company’s trajectory.
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