Analysts have a consensus target price of $ 10.49 in the 12-month period. The price objective is 2.84% higher than the recent closing price of $ 10.20. The 52-week price range is $ 9.47 – 15.08 and the company has a market capitalization of $ 52.67B. Analysts covering the shares maintain a consensus Hold rating, according to Zacks Investment Research. zero analyst has rated the stock with a sell rating, 2 has assigned a hold rating, zero says it’s a buy, and 1 have assigned a strong buy rating to the company.
Telefonica S.A. (ADR) (TEF) presented on February 26, 2016 the corresponding results of the 2015 fiscal year, a year in which the Company firmly advanced down the road of long term profitable and sustainable growth, while simultaneously improving its competitive position in key markets.
At the end of 2015, and excluding non-recurring impacts, the net profit of Telefónica increased nearly 30% year-on-year, reaching 5,787 million euros throughout the entire year, raising the basic earnings per share to 1.12 euros in 2015 (+23.9%).
The net result of the fiscal year is affected by extraordinary factors, mainly an impact of 2.602 million euros during the fourth quarter of the year, stemming especially from the provision related to the voluntary employment suspension plan of Telefónica España. Considering the aforementioned non-recurring impacts, the net profit of the fiscal year is 2,745 million euros (-8.5%).
The commercial activity in 2015, centered on growth and quality services (fibre, smartphones, LTE, pay TV), has intensified, boosted by the increase in revenues which grew 8.7% during the year, reaching 47,219 million euros. In organic terms, this item accelerates its behavior and emphasizes the double digit growth of mobile data revenues (+16.9%). Furthermore, in the fourth quarter the Company consolidates the return to positive behavior of the business in Spain (+0.8%, excluding DTS).
Simultaneously, the savings obtained from the integration synergies in Germany and Brazil, and the efficiencies generated by the simplification program, have contributed to improving the OIBDA (+3.6% organic year-o-year), and the return to the growth of the operating cash flow (+1.9% organic year-on-year).
In this regard, Telefónica fulfilled all the operational guidance set for 2015 and upgraded in July. Furthermore, Telefónica announces guidance* and confirms shareholder remuneration for 2016:
- Revenue growth: expected to be >4% year-on-year.
- OIBDA margin: stabilizing vs. 2015
- CapEx/Sales excluding spectrum: at around 17%.
- Net Financial Debt/OIBDA ratio: <2.35x, adjusted for the closing of the O2 UK sale.
- The 2016 dividend is set at 0.75 euros per share. Payable in cash subject to the closing of the O2 UK sale. Additionally, the amortisation of treasury stock for a total of 1.5% of share capital (subject to the closing of the O2 UK sale) will be proposed at the 2016 AGM.
For the analysis of the results, it’s worth taking into account that in the fourth quarter, year-on-year performance reflected the consolidation of GVT’s results in Telefónica Brasil and DTS’ in Telefónica España (both since 1 May 2015). Likewise, Telefónica UK has been reported as a discontinued operation within Telefónica Group and its assets and liabilities are classified as “held for sale” in compliance with International Financial Reporting Standards (IFRS), as a result of the signing of the definitive sale agreement in March 2015.
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