On Thursday, Bernstein SocGen Group updated its stance on Telenor ASA (TEL:NO) (OTC: OTC:TELNY), upgrading the stock from an Underperform to a Market Perform rating. Accompanying the rating upgrade, the firm also increased the price target from NOK110.00 to NOK133.00. The revision follows a comprehensive review by the new covering analyst at Bernstein, leading to an optimistic reassessment of Telenor’s financial forecasts.
The analyst highlighted Telenor’s strategic moves in Asia, which have resulted in a more favorable competitive environment. Additionally, the company is expected to gain from recent regulatory changes in Norway. The modifications to regional fibre regulations will release Telenor from wholesale access obligations in most areas, while imposing such obligations on local alternative networks in certain regions, benefiting Telenor.
The updated financial outlook by Bernstein includes a 3% and 4% increase in estimated revenues for 2025 and 2026, respectively. Adjusted EBITDA predictions for the same years have also been raised by 5% and 8%. The analyst noted that while risks persist, such as potential market disruptions from the Lyse/Ice merger and intense competition in Sweden, the improved financial projections have altered the risk/reward balance, making the previous Underperform rating no longer justifiable.
Bernstein now believes that the possibility of a dividend cut for the fiscal year 2025, which was previously anticipated, is less likely given the revised financial estimates. This adjustment in expectations reflects a more stable outlook for Telenor’s dividend prospects.
Telenor ASA is a major telecommunications company based in Norway, with significant operations across Scandinavia and Asia. The company’s strategic decisions and the evolving regulatory landscape in its home country are key factors influencing its market performance and analyst ratings.
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