Telenor ASA gained the most in eight months in Oslo trading as Nordea AB advised investors to buy shares in the Nordic region’s largest mobile-phone operator as growth in Norway, Thailand and Pakistan improves earnings.
Telenor rose as much as 4.1 percent to 119.7 kroner, the biggest intraday jump since Oct. 24, and traded up 3.7 percent as of 12:31 p.m. in the steepest gain on the OBX index of Norway’s 25 most-traded stocks. Volume was 78 percent of the three-month daily average.
“Telenor is outperforming its European peers on growth and has one of the most solid balance sheets in the sector,” analysts at Nordea, including Stefan Gauffin in Stockholm, said in an e-mail today. “We argue that Telenor deserves to trade at a premium and we upgrade our rating to strong buy from buy.”
The mobile operator is seeking growth in Russia, India and other parts of Asia as competition intensifies in the Nordic region, where almost everyone already has a mobile phone. The Fornebu, Norway-based company is also cutting costs in an effort to maintain earnings growth and plans to find savings of 5 billion kroner ($821 million) over the next four years, it said in September.
Second-quarter earnings are likely to benefit from stronger profitability and wider market share in Thailand, the Nordea analysts said. Gauffin has a 144-krone price estimate on Telenor stock.
Telenor is scheduled to announce second-quarter figures on July 23. Earnings before interest, tax, depreciation and amortization will probably total 8.82 billion kroner, according to the average of 10 analyst estimates compiled by Bloomberg. That compares with 7.84 billion kroner in Ebitda a year earlier and 8.16 billion kroner in the first quarter.
The total dividend payout may rise 18 percent on a compound annual growth basis from 2012 through 2015, analysts at Morgan Stanley, including Terence Tsui, said on March 5.