KPN stock price target raised to EUR5.00 from EUR4.80 at JPMorgan

Investing.com - JPMorgan has raised its price target on Koninklijke KPN NV (AS:KPN) (OTC:KKPNY) to EUR5.00 from EUR4.80 while maintaining an Overweight rating on the Dutch telecommunications company, which currently commands a market capitalization of $18.38 billion.

The stock has returned an impressive +35% year-to-date, significantly outperforming the sector’s +13% gain, despite a 3% pullback in the last month while the sector advanced 3% during the same period. According to InvestingPro, the stock is currently trading near its 52-week high of $4.96.

JPMorgan notes that investors have expressed concerns about the more competitive B2C environment and overbuild on KPN’s fiber footprint, creating pushback on the investment thesis over the past year. However, InvestingPro data shows the company maintains strong financial health with consistently low price volatility, making it potentially attractive for stability-focused investors.

The firm indicates that some investors remain positive on KPN’s mid-term outlook, citing potential benefits from Dutch market trends including fiber adoption, pricing, and convergence, along with the company’s plan to distribute all free cash flow to shareholders. The company has maintained dividend payments for 12 consecutive years, with a current dividend yield of 2.83%.

KPN is expected to focus on mid-term free cash flow and shareholder return trends at its upcoming Strategy Day on November 5, though JPMorgan cautions there is a risk management may reduce near-term service revenue growth expectations. The company currently trades at a P/E ratio of 21.39, with analysts projecting continued profitability for the year.

In other recent news, BofA Securities has upgraded Koninklijke KPN NV’s stock rating from Neutral to Buy. This decision was accompanied by an increase in the price target from EUR4.30 to EUR4.70. The upgrade reflects BofA Securities’ assessment that KPN is well-positioned to outperform its competitors in the Dutch market. These recent developments highlight the firm’s confidence in KPN’s market strategy and potential for growth.

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