Deutsche Bank upgrades Telecom Italia stock rating to Buy on consolidation potential

Investing.com - Deutsche Bank upgraded Telecom Italia SpA (BIT:TIT) (NYSE:TI) from Hold to Buy on Thursday, raising its price target to EUR0.62 from EUR0.34, representing a potential 30% upside. The stock, currently trading at $2.05, has delivered remarkable returns with a 910% gain over the past year. According to InvestingPro, the company maintains a GREAT Financial Health Score of 3.21.

The upgrade comes as Deutsche Bank notes that while Telecom Italia has been among the top-performing telecom stocks this year, with an impressive 844% YTD return, this performance largely offsets underperformance over the previous five years and reflects a low starting point for implied domestic equity value. With its next earnings report due in 22 days, investors can access deeper insights and additional ProTips through InvestingPro.

Deutsche Bank identifies two key factors supporting the upgrade: potential industry consolidation and organic free cash flow recovery. The bank suggests that upcoming spectrum expiries make consolidation more likely, which could improve Telecom Italia’s domestic unlevered free cash flow yields by up to 4 percentage points.

On a standalone basis, Deutsche Bank sees Telecom Italia’s valuation as attractive, with the company projected to reach a 2028 unlevered free cash flow yield of 9.0% (6.3% for domestic operations).

Under a scenario that includes industry consolidation, Deutsche Bank believes Telecom Italia could see upside exceeding 50%, compared to the 30% upside projected in its standalone scenario.

In other recent news, Texas Instruments announced a 4% increase in its quarterly cash dividend, raising it from $1.36 to $1.42 per share. This adjustment elevates the annualized dividend to $5.68. The increased dividend is scheduled to be payable on November 12, 2025, for stockholders who are on record by October 31, 2025. This decision is pending formal declaration by the board of directors at their upcoming regular meeting in October. These recent developments reflect Texas Instruments’ ongoing commitment to returning value to its shareholders.

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