Thursday , May 19 2022

Berenberg recommends buying Tele2 and selling Telia in a pair trading


"At these levels the price of shares we believe that the risk / return is balanced with 20 percent compared to the trade in Tele's, "Berenberg writes tele2 in analysis.

Tele2 fell more than 10 percent from jumps on July 20, and therefore developed significantly worse than the index and Telia during that period. Behind the poor development of Tele2 lies a combination of technical and fundamental reasons, including the merger with Com Hem, Berenberg says.

Telia is now trading to a 15% premium against Tele2, which Berenberg finds unjustified given that Tele2 has a simpler deal with higher growth and a greater return of shareholders from Telia.

Moreover, Berenberg believes that stopping the Tele2 agreement in the Netherlands, which the bank now sees as a likely outcome, will not change the potential of Tele2's dividend.

The analysis is being upgraded Berenberg's recommendation for the purchase (sale) of Tele2, published by the news agency directly on Monday.

The target price for Tele2, however, is adjusted to 116 SEK (124). The reduction refers to a closer look at the growth of ComHem's revenue and the reduced likelihood that the merger between Tele2 and T-Mobil in the Netherlands will be approved.

For Telia, the sales recommendation is repeated and the target price is reduced to 38 SEK (39).

At 10 am, Tele2 rose 1.7 percent to 108: 10, while Telia fell marginally by 0.1 percent to 41.29.

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