PARIS (Reuters) – French telecom stocks fell on Tuesday after British bank Barclays downgraded the sector.
Altice Europe slumped 5.9 percent, while Iliad fell 3.1 percent as Barclays cut its rating on those stocks to “underweight” and “equal weight” respectively, while Bouygues and Orange shares also retreated as after Barclays cut its price targets on those two stocks.
“After an irrational level of promotions in 2018 that brought market ‘ROCE’ (return on capital employed) to 5 percent, prolonged market repair is needed to protect the revenue base,” wrote Barclays in a note.
“The competitive environment is improving since Q3 2018, yet sustained discipline is uncertain. In-market consolidation is the best option, we believe, but appears unlikely short-term,” added Barclays.
Reporting by Sudip Kar-Gupta, Patrick Vignal and Michal Aleksandrowicz