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Telefonica (ES:TEF)
BME:TEF
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Telefonica (TEF) AI Stock Analysis

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ES

Telefonica

(BME:TEF)

Rating:54Neutral
Price Target:
Telefonica's stock faces challenges primarily from financial performance issues, including negative net income and declining revenue. While technical indicators show some positive momentum, and the high dividend yield is appealing, these factors are overshadowed by the company's profitability and valuation concerns.
Positive Factors
Debt Management
Net debt is 2% lower than expectations.
Revenue Performance
Q1 revenue is 1.3% ahead of consensus with Other and eliminations, Germany, and Hispam main contributors.
Negative Factors
Dividend Expectations
The 2025 dividend per share was in line with expectations.

Telefonica (TEF) vs. iShares MSCI Spain ETF (EWP)

Telefonica Business Overview & Revenue Model

Company DescriptionTelefonica S.A. is a global telecommunications company headquartered in Madrid, Spain. It operates in several countries, primarily in Europe and Latin America, and offers a wide range of services including mobile and fixed-line telephony, broadband, and digital solutions. As one of the largest telecommunications companies in the world, Telefonica is committed to providing innovative communications solutions to individuals, businesses, and governments.
How the Company Makes MoneyTelefonica generates revenue through several key streams. The primary source is its telecommunications services, which include mobile voice and data services, fixed-line telephony, broadband internet, and television services. The company also earns money through digital services, such as cloud computing, cybersecurity, and IoT solutions, which cater to both consumer and enterprise markets. Additionally, Telefonica benefits from strategic partnerships and joint ventures, which enhance its service offerings and expand its market reach. The company's earnings are also influenced by regulatory environments, technological advancements, and competitive dynamics in the telecommunications industry.

Telefonica Financial Statement Overview

Summary
Telefonica faces profitability challenges and declining revenue, with a negative net income and declining free cash flow growth. Despite reasonable operational efficiency and manageable debt levels, these issues weigh heavily. A stable cash position provides some cushion, but improvements in revenue and profitability are needed.
Income Statement
45
Neutral
Telefonica's income statement shows mixed performance. The TTM gross profit margin is approximately 69.5%, which is strong, yet the net profit margin is negative due to a net loss, indicating profitability challenges. Revenue has decreased over the last year, with a negative revenue growth rate of about -2.2%, suggesting declining sales. The EBIT margin stands at 6.1%, and the EBITDA margin is 30.7%, indicating reasonable operational efficiency despite the net loss.
Balance Sheet
55
Neutral
The balance sheet reflects moderate financial stability. The debt-to-equity ratio is low at approximately 0.39, indicating manageable debt levels relative to equity. However, the company's return on equity is negatively impacted by the net loss. The equity ratio is 19.9%, suggesting a moderate reliance on equity financing. Overall, the balance sheet shows stability but highlights concerns regarding profitability.
Cash Flow
60
Neutral
The cash flow statement indicates a stable cash position with an operating cash flow to net income ratio that is strong due to positive operating cash flows despite negative net income. The free cash flow to net income ratio is also favorable. However, the free cash flow growth rate is negative, reflecting challenges in increasing cash generation from operations.
BreakdownDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue41.31B40.65B39.99B39.28B43.08B
Gross Profit28.76B20.23B27.05B27.02B30.06B
EBITDA12.35B10.34B13.54B22.53B13.82B
Net Income-49.00M-892.00M2.01B8.14B1.58B
Balance Sheet
Total Assets100.50B104.32B109.64B109.21B105.05B
Cash, Cash Equivalents and Short-Term Investments9.26B7.67B9.69B12.41B8.10B
Total Debt45.02B44.12B8.68B8.07B50.85B
Total Liabilities77.75B77.23B77.93B80.53B86.79B
Stockholders Equity19.35B14.30B25.09B22.21B11.23B
Cash Flow
Free Cash Flow5.20B5.49B5.30B4.10B6.18B
Operating Cash Flow10.99B11.65B10.81B10.27B13.20B
Investing Cash Flow-5.22B-4.29B-5.33B5.90B-7.79B
Financing Cash Flow-4.67B-7.19B-7.92B-12.99B-5.44B

Telefonica Technical Analysis

Technical Analysis Sentiment
Positive
Last Price4.49
Price Trends
50DMA
4.49
Positive
100DMA
4.33
Positive
200DMA
4.16
Positive
Market Momentum
MACD
<0.01
Positive
RSI
47.57
Neutral
STOCH
29.52
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ES:TEF, the sentiment is Positive. The current price of 4.49 is below the 20-day moving average (MA) of 4.52, above the 50-day MA of 4.49, and above the 200-day MA of 4.16, indicating a neutral trend. The MACD of <0.01 indicates Positive momentum. The RSI at 47.57 is Neutral, neither overbought nor oversold. The STOCH value of 29.52 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ES:TEF.

Telefonica Peers Comparison

Overall Rating
UnderperformOutperform
Sector (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
66
Neutral
¥364.46B14.792.24%2.48%5.40%-15.25%
ESTEF
54
Neutral
€25.29B-0.55%6.70%-1.34%-181.23%
DE4HW
€70.05M
ESLLN
€19.95M20.4525.01%
* Communication Services Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
ES:TEF
Telefonica
4.49
0.69
18.28%
DE:4HW
Parlem Telecom Companyia de Telecomunicacions SA
3.42
0.08
2.40%
ES:LLN
LleidaNetworks Serveis Telematics SA
1.19
0.04
3.48%

Telefonica Corporate Events

Telefónica Issues 750 Million Euro Notes to Bolster Financial Strategy
Jun 18, 2025

Telefónica, through its subsidiary Telefónica Emisiones, has issued 750 million euros in notes under its EMTN Program, maturing in 2035 with a 3.941% annual coupon. This move signifies Telefónica’s strategic financial maneuver to strengthen its market position and ensure long-term operational stability, with the notes expected to be traded on Euronext Dublin.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.

Telefónica Sells Stake in Uruguayan Unit to Millicom for $440 Million
May 21, 2025

Telefónica has announced the sale of its entire stake in Telefónica Móviles del Uruguay S.A. to Millicom Spain, S.L. for USD 440 million. This move is part of Telefónica’s strategy to manage its asset portfolio and reduce its exposure in the Latin American market, pending regulatory approvals.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.

Telefonica Reports Q1 2025 Financial Results
May 14, 2025

Telefonica has released its financial results for the first quarter of 2025, prepared under the International Financial Reporting Standards. The company emphasizes its regional and integrated management model, which allows for the independent presentation of operational results by business units, excluding inter-company billing. This approach aims to provide a clearer view of the company’s performance, solvency, and liquidity, without affecting the consolidated results.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.

Telefónica Highlights Strategic Focus Amid Market Challenges
May 14, 2025

Telefónica’s recent financial results presentation highlights the company’s strategic focus on navigating competitive telecommunications markets. The release underscores the company’s commitment to sustainability and governance, while also addressing potential risks and uncertainties that could impact future operations.

The most recent analyst rating on (ES:TEF) stock is a Hold with a EUR4.00 price target. To see the full list of analyst forecasts on Telefonica stock, see the ES:TEF Stock Forecast page.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: May 17, 2025