Goldman Sachs Group Inc. sees value in Bezeq Israeli Telecommunication Corp., the worst Israeli-based performer this quarter on the TA-25 stock index, and says the risk the company may be forced to split from its units is overblown.

Goldman expects Bezeq’s stock to rise to 8.7 shekels in the next 12 months, a potential upside of 18 percent to the current share price as of 2:49 p.m. in Tel Aviv. The regulatory concerns threatening to force the company to break apart are unlikely to be implemented, analysts Stanislav Kondratyev and Alexander Balakhnin wrote in an e-mailed report.

Bezeq’s decline presents an “attractive opportunity to buy a high-quality telecom stock with stable cash flows, healthy dividends and long-term upside potential from the removal of structural separation,” the Goldman analysts wrote. “We do not expect any material changes in the regulatory approach.”

The Israeli government has yet to name the minister who will reform the telecommunications industry. The country’s attorney general earlier this month ordered Prime Minister Benjamin Netanyahu, who is also communications minister, to stop interfering with matters relating to Bezeq because of his relationship with its controlling shareholder Shaul Elovitch.

Bezeq stock dropped 13 percent since the end of March to 7.36 shekels, heading for the worst quarter in a year as the Tel Aviv-based company missed first-quarter profit estimates and local competition issues remain unresolved. The company’s shares have been trading below their 50-day, 100-day, and 200-day moving averages for more than a month.

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