TalkTalk: RBC Capital Markets downgrades stock.

(CercleFinance.com) - RBC Capital Markets has downgraded its rating on the British broadband operator TalkTalk stock from "outperform" to "sector perform," and has cut its target price for it, following the group's H1 results.


While the group's fixed low price plan (FLPP) is clearly driving subscriber growth, as expected, margins are being squeezed by acquisition costs, fibre and other cash costs, the Canadian broker explained in a report.

"With profitability unlikely to return before the first FLPP subs start to come off contract (early 2018) and leverage remaining high, we now feel risks outweigh the limited upside," RBC said in a report.

The broker has cut its price target on the shares from 225 pence to 190 pence.



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