Overvalued, “sopravvalutato”. Questo il giudizio di Allan Nichols, analista azionario di Morningstar, sul titolo Telecom Italia dopo la pubblicazione dei risultati trimestrali. Ecco, in sintesi, le motivazione della revisione dell’outlook sul titolo sulla base dei nuovi elementi e dati disponibili al fine di valutarne il vantaggio competitivo e la relativa sostenibilità nel tempo (nella terminologia Morningstar “Economic Moat”).
Telecom Italia reported nine-month results that were below our expectations, but for the time being, we are maintaining our fair value estimate and narrow moat rating. The firm reported that revenue fell 6.9% year over year, versus our full-year projection of a drop of 5.9%. The Italian operation continues its slow turnaround, with a decline of 2.2% in organic terms, or 1.8% in reported terms, after some small acquisitions. The mobile business in particular is showing improvement, as it generated a tiny positive gain in the third quarter, versus the year-ago period. It benefited from stabilisation of the subscriber base, which declined only 1.2% year over year and marginally on a sequential basis to 30 million. In addition, average revenue per user (EUR 12.50) was flat versus the year-ago period, and increased 5% sequentially. While this is a promising sign, the fixed-line side declined 1.7% despite growth in the broadband market, as it has now built fibre past 10.2 million premises, or 40% of the population. However, while its faster buildout of 4G services and fibre provides a better network to build revenue in the future, it has had the side effect of preventing the firm from paying down its debt. We continue to view Telecom Italia’s bloated balance sheet, which restricts the firm’s flexibility, as one of its biggest issues.
Meanwhile, Telecom Italia’s Brazilian business, which is heavily skewed towards prepaid subscribers, is struggling more with the weak economy. Its results were much worse than those of Telefonica Brasil, which has twice as large a percentage of its wireless customers on contract plans. Telecom Italia’s adjusted EBITDA margin came in at 40.8%, versus our full-year projection of 39.8%. However, it also took EUR 460 million in charges for various disputes and reorganisation charges, which pushed its reported EBITDA margin down to 37.8%. We continue to view the shares as significantly overvalued.