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MarketScreener Homepage  >  Equities  >  Euronext Paris  >  Iliad S.A.    ILD   FR0004035913

ILIAD S.A.

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Berenberg downgrades Telecom Italia, citing 'toxic cocktail'

05/18/2018 | 04:17am EST
FILE PHOTO: The Telecom Italia logo is seen at the headquarters downtown Milan, Italy

MILAN (Reuters) - Telecom Italia (TIM) shares fell on Friday after Berenberg downgraded Italy's biggest phone group to "sell" from "hold", citing pressure from pending new competition, political headwinds and governance issues.

The broker also cut its target price on TIM by 7 percent to 0.66 euros. The shares traded at 0.75 euros at 0810 GMT, down 1.4 percent after earlier slipping by more than 2 percent.

Activist fund Elliott wrested board control from top shareholder Vivendi earlier in May after a two-month campaign but the outlook remains challenging for the former state phone monopoly.

"Mix a looming price war, political interferences, governance conflicts, forex headwinds and you will end up with a toxic cocktail. This is what is on the menu for Telecom Italia ," Berenberg said in a note.

The May 4 shareholder vote, through which Elliott secured 10 or two-thirds of available board seats, was supposed to give TIM a more independent board and loosen the grip media group Vivendi has had over the company.

But the French investor, which owns 24 percent, on Thursday said a "risk of a dismantling" of TIM could prompt the company to call another shareholder meeting to change the Italian phone group's board.

Beyond a governance overhaul, Elliott has proposed a spin-off and partial sale of the soon-to-be-created network company, a conversion of savings shares, a return to dividends and asset sales. But it recently added it would be up to the new board and management to decide whether and when to consider such actions.

"Investors should take (Vivendi's) threat seriously and factor in that it indicates the likely reluctance of Vivendi to accept the long-awaited conversion of the saving shares and it could trigger management instability at TIM," Berenberg added.

Vivendi's threat offered a striking contrast with comments made earlier on Thursday by TIM's boss Amos Genish, who said he had the full confidence of the board to push through with an ambitious three-year business plan unveiled in March.

Genish said none of the proposals made by Elliott were being discussed, stressing that towers unit INWIT and TIM's Brazilian unit were strategic and not for sale.

The Israel-born executive has made staying on as CEO conditional on being able to execute the new strategy focusing on a digital transformation of TIM, fixing its finances and getting back investment grade credit rating.

Following Elliott's proxy fight, investors are again focusing on TIM's operational challenges, including its 25.5 billion euros ($30 billion) of net debt and new rivals appearing in broadband and mobile.

A headache is the pending arrival in Italy next month of French rival Iliad, which is likely to pressure margins.

(Reporting by Agnieszka Flak; Editing by Keith Weir)


© Reuters 2018
Stocks mentioned in the article
ChangeLast1st jan.
CHANGE INC. -0.15% 3380 End-of-day quote.-4.11%
ILIAD S.A. -3.12% 160.15 Real-time Quote.-4.73%
INWIT S.P.A. 0.27% 9.265 Delayed Quote.-6.70%
JUST GROUP PLC -2.74% 79.65 Delayed Quote.14.45%
TELECOM ITALIA S.P.A. -1.56% 0.373 Delayed Quote.-1.17%
VIVENDI SE -0.53% 26.11 Real-time Quote.-1.02%
WILL GROUP, INC. -0.81% 976 End-of-day quote.-2.98%
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Financials
Sales 2020 5 702 M 6 885 M 6 885 M
Net income 2020 302 M 364 M 364 M
Net Debt 2020 4 906 M 5 924 M 5 924 M
P/E ratio 2020 32,7x
Yield 2020 1,61%
Capitalization 11 222 M 13 568 M 13 551 M
EV / Sales 2020 2,83x
EV / Sales 2021 2,30x
Nbr of Employees 10 681
Free-Float 23,3%
Chart ILIAD S.A.
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Iliad S.A. Technical Analysis Chart | ILD | FR0004035913 | MarketScreener
Technical analysis trends ILIAD S.A.
Short TermMid-TermLong Term
TrendsBearishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 188,24 €
Last Close Price 160,15 €
Spread / Highest target 56,1%
Spread / Average Target 17,5%
Spread / Lowest Target -18,2%
EPS Revisions
Managers and Directors
NameTitle
Thomas Reynaud Chief Executive Officer, Director & Senior VP
Xavier Niel Chairman & Senior Vice President
Nicolas Emmanuel Jaeger Group Chief Financial Officer
Cyril Poidatz Non-Independent Non-Executive Director
Maxime Lombardini Vice Chairman
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