UPDATE: Barclays Downgrades China Telecom to Equal-Weight on Risk/Reward
Barclays lowered its rating on China Telecom (NYSE: CHA) from Overweight to Equal-weight as it no longer sees a favorable risk reward to shares.
Barclays commented, "CT continues to execute extremely well in driving scale in mobile and returning to modest growth in fixed-line, in our view. Expectations look reasonably priced in though, and we see no material catalysts on a 12-month view. Thomson Reuters consensus expectations are for 30.6%/25.7% earnings growth into 2013E/14E – we see the risk of downward earnings revisions hereon. This, along with a lack of catalysts and valuation that is not cheap, leads us to downgrade our rating to EW (from OW)."
China Telecom closed at $57.79 on Monday.
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