Tele2 Rises as Credit Suisse Sees Growth Upside: Stockholm MoverAdam Ewing
Tele2 AB rose the most in two weeks after Credit Suisse Group AG said prospects of improving mobile profitability in Norway, higher Kazakhstan sales and stable Swedish pricing mean the carrier’s investment case has improved.
The shares rose as much as 2.6 percent, the biggest intraday increase since May 15, and were up 1.1 percent at 82.9 kronor at 10:53 a.m. in Stockholm, valuing the operator, which is based in the Swedish capital, at 37.8 billion kronor ($5.7 billion). The shares have fallen 4.5 percent this year.
“We believe Tele2 earnings before interest, taxes, depreciation and amortization can grow mid-single digits driven by positive revenue growth,” Jakob Bluestone, an analyst at Credit Suisse in London, wrote in a note today. He raised his rating on the share to outperform from underperform and increased the price estimate by 39 percent to 100 kronor.
Bluestone said Tele2’s Norwegian margins could rise next year as it comes out of its national roaming agreements and wins market share. Sales from Kazakhstan should double over the next two years, he added.
Tele2, which sold its Russian assets to VTB Group for $2.4 billion in equity and $1.15 billion in net debt in March, had 42 percent of its first-quarter sales from Sweden, its largest market.