Orange: Barclays upgrades stock

(CercleFinance.com) - On Wednesday Barclays upgraded its rating on Orange shares from "underweight" to "equal weight", having nudged up its target price for them from 9.
5 euros to 10.5 euros (current price about 11 euros, +1%).

In a report on European telecom operators, the broker justifies its upgrade by the strength of prices in the French market, which rose by 1% in mobile telephony and 5% in fixed-line telecommunications last year, despite intense promotions at entry level.

Barclays says it expects this positive momentum to continue this year.

However, the analyst said in the report that the broker's earnings estimates for Orange remain below the consensus, while justifying its caution by the French group's governance structure, where the representation of the French state and the unions have so far favoured a policy of heavy investment at the expense of payouts to shareholders.

Barclays notes that its new target price is pretty much in line with current price levels, meaning that it sees little upside potential at this stage, therefore explaining its neutral rating.


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