Bernstein takes a cautious view of the European telecom sector and downgrades German telecom giant Deutsche Telekom and Swedish Tele2 to market perform, from outperform, while Elisa and Telia are rated underweight. Bloomberg News reports.
Deutsche Telekom is weighed down, among other things, by competition in the German fixed-line market and reports of a possible merger with T-Mobile US, where Bernstein sees limited industrial synergies.
Tele2 is downgraded mainly on valuation grounds, despite resilient operations, strong cash generation and balance sheet.
Telecom giant BT Group, rated outperform, is Bernstein’s sector favorite.
