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Investing.com - BofA Securities upgraded Koninklijke KPN NV (AS:KPN) (OTC:KKPNY) from Neutral to Buy and raised its price target to EUR4.70 from EUR4.30. The stock has shown strong momentum, delivering a 33% return year-to-date and trading near its 52-week high. According to InvestingPro analysis, KPN currently appears fairly valued.
The upgrade comes as BofA Securities views KPN as "structurally positioned to outperform competition in the Dutch market" according to a research note issued by the firm.
BofA highlighted that KPN’s leverage is already contained and the company has demonstrated a clear commitment to returning cash to investors, making the outlook for cash returns attractive as its fiber build matures and efficiencies accrue.
The firm expects KPN’s upcoming strategic review in November to add fiber and copper decommissioning efficiencies to its longer-term 2030 targets, which could support upside to consensus forecasts.
BofA Securities noted these efficiency measures are already well represented at BT, and believes they could lead to increased cash returns as KPN’s leverage targets are raised.
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