Telefónica: 27% chance in Ibex 35 after presenting your accounts

Telefónica: 27% upside potential after presenting your accounts in Ibex 35

Telefonica tries to rebuild its pricing as its quarterly accounts at the end of March return prices to levels set by the operator headed by José María Álvarez Palet. Then weakness, therefore, after slashing its year-on-year profit by 57% to 298 million euros.

Despite this, its revenue grew by 6.7% in the year to March and put it above the 10,045 million euros expected by the market. And, in addition, the company indicates that they will remain in the expected trend systematically throughout the year, cWith revenue growing 4.9% under these parameters, its OIBDA, operating results before amortization grew 1.1%. And the CapEx/Sales ratio is 11% in the first quarter of the year.

Telefonica 1Q 2023 Results

They have already confirmed the 2023 figures regarding the dividend, Cash with a second tranche of 0.15 euros per share that Telefónica will pay on June 15, Furthermore, it highlights that “2023 cash dividends of €0.30 per share will be paid on December 14, 2023 (€0.15 per share) and June 2024 (€0.15 per share). For this purpose of the second tranche, ordinary shareholders will be proposed to adopt relevant corporate resolutions at its meeting.And to this has been added the reduction in share capital this April, Through liquidation of its own shares, specifically about 24.78 million.

With respect to its market cap, we see that the price broke the positive trendline with the reduction in the previous session, due to which it has already accumulated more than 3.2% in 20 days, while, andIts earnings have reached 16.5% so far this year

Telefonica Annual Price Quote

Regarding the recommendations of Renta 4 They make the stock overweight after the results with a target price of 4.60 euros per share. Goldman Sachs maintains a better outlook management rating through analyst Yemi Falana with a target price of 5 euros per share of the operator, which puts its shares at about 27% upside to your current price. Returns the potential correction of the month.

For its part, from Bankinter they are neutral on value with a PO of 4.20 euros per share, following data that slightly beat estimates. But he estimates that despite its high dividend yield, which reaches 7.4%, biological generation of Free cash flow softens in high cost of debt environment and the economic downturn, which hinders the triple objective of debt reduction, investment in innovation and a source of future growth and shareholder remuneration.

Araceli de frutos EAFI director Araceli de Frutos explains that “when recessions are considered, cyclical sectors are punished, so we have to seek refuge in more defensive sectors such as the telecommunications sector, which Provides high dividend yield They have published the results and it seems that these conditions are normalizing within the sector. In Spain we’ll look at Telefónica, which has revealed some very positive accounts with a reduction in debt, With contributions from Germany, Brazil and Spain, which is also becoming common in its geographic diversification.

For Jose Antonio Gonzalez, financial market analyst at Investment Strategies highlights that in Telefónica “we are seeing drilling of an area of ​​short-term technical relevance, identified around €3,993 / €3,948 per share, a movement supported by bearish divergence in the daily MACD oscillator, a movement that make capable Update of next bearish targets towards the next area of ​​technical relevance, estimated at €3,665 / €3,634 per share”.

Telefonica on the weekly (left) and daily (right) charts with the MACD oscillator and trading volume

Technical analysis of Telefonica price

Meanwhile, the Premium Strength Indicator prepared by Estrategias de Inversion shows us that Telefónica, since May 8, has moved from very strong to strong in both the medium and long term with operations based on breaking resistance and buying support. Risk of accumulation of excess and bearish data.

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