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Investing.com - UBS downgraded Globe Telecom Inc. (PM:GLO) (OTC:GTMEY) from Buy to Neutral and lowered its price target to PHP1,650.00 from PHP2,300.00.
The Philippine telecommunications company has seen its stock decline 27% year-to-date, underperforming competitor PLDT, according to UBS.
The downgrade reflects increased earnings risk from the Konektadong Pinoy law and concerns about the Philippine administration’s crackdown on online gaming, which could negatively impact Globe’s digital wallet business.
UBS noted these regulatory risks overshadow Globe’s second-quarter earnings rebound, with the stock falling just 3% since the passage of the Konektadong Pinoy bill.
The investment bank expects Globe shares to trade sideways, supported by 8% free cash flow and 6% dividend yields, until the final implementing rules and regulations provide clarity on future share price direction.
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