Telecom Italia shares soar on the Stock Exchange, gaining more than four percentage points today, at 0,907 euros per share.
The wave of purchases was triggered by the American investment bank Goldman Sachs, which included Telecom Italia shares in its "conviction buy list" and raised the target price of the security from 0,95 to 1,5 euro, confirming the “buy” recommendation.
The US broker believes that there may be positive effects on the value of the stock deriving from the consolidation process which could involve the assets in Italy and Brazil. The sale of Tim Participacoes (Tim Brasil) could reduce the debt and help find the necessary resources to invest in the development of the home network.
"We believe that consolidation (in Brazil) is possible after the Brazilian elections of 5 October, now that the capital increase of Grupo Oi for the merger with Portugal Telecom is completed," reads the Bank's note.
The main risks that could prevent the achievement of the target price are the deterioration of profits in Italy and the failed sale of Tim Brasil, Goldman writes, adding that the convergence between fixed and mobile will lead to an increase in competitive pressure on individual operators in Europe. but also to a new phase of consolidation which will help the valuation of securities.
Overall, "we see Iliad and Telecom Italia as the main beneficiaries of the consolidation," concludes the report.
