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UPDATE: Morgan Stanley Upgrades Telefonica to Overweight on Spain Structural Change

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Morgan Stanley upgraded Telefonica (NYSE: TEF) from Equal-weight to Overweight.

Morgan Stanley analyst Luis Prota commented, "Spain is becoming a more attractive market place for TEF, as it moves to a convergent, infrastructure-based market. Fusion's success has been the catalyst, in our view – peers may have matched TEF's tariffs but reselling part of the bundle only makes it profitable for integrated players. Jazztel, Vodafone and Orange all moved to deploy fibre, but are running well behind TEF. The focus on ROCE will reduce pricing pressure, while lower churn will drive higher margins. On 5x EBITDA, 10-11x PE and 12-14% FCFE yield, TEF looks cheap."

Telefonica closed at $14.51 on Monday.

Latest Ratings for TEF

DateFirmActionFromTo
Mar 2014Bank of AmericaDowngradesNeutralUnderperform
Mar 2014CitigroupUpgradesSellNeutral
Jan 2014Espirito SantoDowngradesNeutralSell

View More Analyst Ratings for TEF
View the Latest Analyst Ratings

Posted-In: Morgan StanleyAnalyst Color Upgrades Analyst Ratings

 

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