Eyes on Telecom Italy at Piazza Affari. In the afternoon, the stock travels up by more than 2%, while the CEO, Flavio Cattaneo, illustrates in a conference call the perspectives for the group in the new business plan 2017-19.
"We are ready to respond to the entry of Iliad with a second brand – reiterated the CEO – The second brand will help us defend our position on the premium market. We are boosting the engine while we are racing” and “we are going faster and faster”. "We are not waiting for outside help."
In 2016 “we obtained very good results despite the turbulence – he added – We know how to navigate in any sea always bringing the ship to port. We have 12,5 billion euros of liquidity which ensures us financial coverage until 2020. We are able to face any turbulence on the capital markets”.
Cattaneo noted that 71% of gross debt is at a fixed rate and has an average maturity of eight years.
Also pushing the title are the reports of the investment banks that promote the accounts and the objectives of the plan. Deutsche Bank, which has a target price of 1,25 euros on the stock, speaks of "better than expected" guidance for 2019 and of a "right strategy with the right numbers".
Thumbs up from too redburn (target price 1,3 euros) according to which the CEO is bringing "growth" and "not just cost cutting". Bernstein speaks of "successful results, beyond expectations", confirming the 'outperform' judgment and the target price of 1,1 euro.
Morgan Stanley, which suggests accumulating shares (overweight) with a target price of 1,15 euros, the 2017-2019 plan could lead to "a rise in the earnings consensus" and shares "could soon reach cruising speed" given that Cattaneo “started all the engines”. Credit Suisse was also moderately positive, with a Target price of 0,90 euro against 0,84 on the Stock Exchange on Monday.
According to the bank's analysts, the plan drawn up by CEO Cattaneo is "encouraging" even if the competitive pressures exerted by Iliad and Open Fiber risk remain on the domestic market side.
"In our plan, no dividends are envisaged for ordinary shares", declared the financial director of Telecom Italia, Pier Giorgio Peluso, during the conference call. The manager explained that in 2017 and 2018 the free cash flow expected for the group is around 700 million a year. The financial director also indicated that already in 2016 the debt was significantly reduced, by 2,2 billion, also thanks to the cost control that will continue in the years to come. “I must underline – he said – that the flexibility on costs will be more than compensated by the parallel trend of revenues and EBITDA”.
