Telia: Strategy is progressing, but valuation picture has changed
In Q1, Telia's operational performance was good on a broad front, which increases our confidence in the strategy's efficiency and the earnings turnaround continuing. We forecast moderate earnings growth over the next few years with a stronger growth base. Additionally, strong balance sheet offers strategic room for maneuver. The main risk is related to the implementation of the strategy and, in particular, the realization of cost savings. The valuation of the share has become neutral as a result of the share price going up, but at the same time a strong dividend yield of 5% limits the downside.
Telia Company
Telia Company is active in the telecom sector. The company delivers a wide range of services within voice, IP and capacity services, mainly through wholly-owned international carrier networks. The customers are found among private customers and corporate customers. Most of the business is done in the Nordic countries, the Baltics, and Europe. The company was formed by a merger of Telia and Sonera. The head office is located in Solna.
Read more on company pageKey Estimate Figures2022-04-27
2021 | 22e | 23e | |
---|---|---|---|
Revenue | 88,342.6 | 89,717.4 | 91,488.2 |
growth-% | -0.95 % | 1.56 % | 1.97 % |
EBIT (adj.) | 9,928.9 | 11,970.5 | 12,627.6 |
EBIT-% (adj.) | 11.24 % | 13.34 % | 13.80 % |
EPS (adj.) | 1.54 | 1.84 | 2.06 |
Dividend | 2.05 | 2.10 | 2.15 |
Dividend % | 5.79 % | 6.63 % | 6.79 % |
P/E (adj.) | 22.96 | 17.26 | 15.41 |
EV/EBITDA | 5.88 | 6.48 | 6.33 |