Orange Is The New Downgrade At HSBC

Analysts at HSBC Global downgraded Orange SA (ADR) ORAN from Buy to Hold and maintained a target price of 15.50 EUR. The bearish decision was based on the high level of competition in France's telecom environment and a lack of positive catalysts, according to analyst Nicolas Cote-Colisson.

The French telecom market is in the middle of a "promotional price war," according to Cote-Colisson, with firms introducing frequent temporary and permanent discounts to gain and protect market share. However, with Orange more focused on the higher-end marker, with less aggressive promotions, they are able to better defend their position said Cote-Colisson.

"Orange can leverage its superior network quality in both fixed (it is a leader in fibre, and is regaining market share in very densely-populated areas) and mobile," said Cote-Colisson. "But the cost of defending its position, combined with regulatory headwinds (roaming and special numbers), limit its ability to surprise on the upside, especially over the coming months."

Shares traded recently at $15.40, down 1.1 percent.