Elisa Corporation, the Services sector company, was revisited by a Wall Street analyst today. Analyst Terence Tsui from Morgan Stanley downgraded the rating on the stock to a Hold and gave it a €43.00 price target.
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Terence Tsui has given his Hold rating due to a combination of factors impacting Elisa Corporation. The Finnish mobile market has become more competitive than anticipated, leading to a slowdown in Elisa’s mobile service revenue growth. This is partly due to macroeconomic uncertainties and a shift in consumer behavior, with a significant portion of the customer base becoming more price-sensitive. Additionally, changes in market shares, particularly the growth of DNA and Telia’s stabilization, have increased competitive pressures on Elisa.
Furthermore, the competitive landscape is expected to remain challenging in the near term, with high customer churn anticipated during promotional periods. The entry of new mobile virtual network operators (MVNOs) also poses a threat to Elisa’s market position. Despite the company’s ambitious growth targets under new management, Tsui views these goals as optimistic given the current market conditions. Consequently, the stock’s valuation aligns with peers, but lacks compelling catalysts for significant upside, justifying the Hold rating.