Street Calls of the Week
Investing.com - Kepler Cheuvreux has reinstated coverage on Swisscom AG (SIX:SCMN) (OTC:SCMWY) with a Reduce rating and a price target of CHF520.00.
The research firm’s decision comes amid concerns about Swisscom’s growth prospects, with Kepler Cheuvreux noting that the telecommunications company will "probably not show meaningful growth in the next three years."
Kepler Cheuvreux acknowledges that Swisscom maintains "attractive investment features" along with "structural improvements and synergies," but argues these factors "can hardly justify the current multiples versus peers."
The firm points to "soft earnings momentum" as a continuing challenge, noting that "the decline in service revenues does not seem to have reached an inflection point, either in the Swiss or Italian markets."
For investors specifically interested in the Italian market or telecommunications consolidation opportunities, Kepler Cheuvreux suggests that Telecom Italia represents "a better option" than Swisscom.
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