Orange: Oddo BHF downgrades stock, cutting TP

(CercleFinance.com) - Oddo BHF has downgraded Orange shares from 'outperform' to 'neutral', trimming its target price for them from E12 to E11.
5.

The analyst says that Orange's Q1 performance reflects the current imbalance in the market, with Iliad and Bouygues capturing 80% of growth (vs. Orange ~20%, excluding the declining wholesale business).

While the decline in Orange's customer base appears to be limited to 1% per year, the risk seems greater to us in the medium term, Oddo BHF says.

The broker therefore reduces its 2024 sales/EBITDA forecasts by an average of 8%-10% (also cutting EPSe by 3%-4%).

For 2024, analysts forecast ~2% pro-forma EBITDAaL growth (in line with the 'low single digit growth' target) and 2%-3% FCF growth (vs. 4% guidance)', Oddo BHF adds.

Amongst the various factors that could restore the share's potential, Oddo BHF encourages management to find ways of creating value over the next 5 years, through an MVNO-type entry into an uncompetitive market or the purchase of discounted assets.


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