Telefonica, the Services sector company, was revisited by a Wall Street analyst yesterday. Analyst David Wright from Bank of America Securities reiterated a Hold rating on the stock and has a €3.80 price target.
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David Wright has given his Hold rating due to a combination of factors influencing Telefonica’s current financial outlook. The company’s strategic review has resulted in a more cautious free cash flow projection and a significant dividend reduction planned for 2026. This reduction appears to be driven by unexpected cash flow challenges rather than operational issues, suggesting a need for financial restructuring.
Additionally, Telefonica’s position in key markets such as Germany and Spain is seen as suboptimal, and governance challenges persist in the UK. The dividend cut may also indicate a potential move towards equity issuance to support mergers and acquisitions, which could help address these strategic weaknesses. Despite some positive adjustments in EBITDA forecasts, the overall financial outlook remains cautious, justifying the Hold rating.
In another report released on November 12, Barclays also maintained a Hold rating on the stock with a €4.00 price target.
0TDE’s price has also changed moderately for the past six months – from EUR4.412 to EUR3.715, which is a -15.80% drop .