United Internet AG rose the most in almost a year after Morgan Stanley said the German broadband provider’s earnings will probably increase and the company’s dividend may double by 2015.
United Internet’s earnings per share may grow an average of 30 percent every year from 2012 to 2016 as the company continues to add broadband customers and win clients for its web-hosting product, according to analysts led by London-based Ryan Fox. The shares rose as much as 5.7 percent today to 19.60 euros, the highest since at least 1998, and were up 4.2 percent as of 2:10 p.m. in Frankfurt, giving the company a market value of 3.8 billion euros ($4.9 billion).
United Internet, based in Montabaur, returned to broadband user growth last year for the first time since 2008 and is investing to bring its website-creation kit to more markets. The company, which also resells wireless capacity, may double its dividend by 2015, Morgan Stanley said, setting a price estimate of 24.80 euros in new coverage with an overweight rating.
“United Internet combines stable free cash flow generation from its broadband business with a niche cloud growth story through its do-it-yourself Web hosting application,” the analysts said in a note to clients today. “We see United Internet as a structural winner” in the applications segment.