Cairo – Mubasher: Pharos Research has upgraded the fair value (FV) of Telecom Egypt (TE) at EGP 15.25 per share, with an "Equalweight" recommendation, according to a recent report.
TE’s launching for mobile services is a double-edged sword as it could negatively impact the company’s financial performance, Pharos added, noting that “the roaming agreements do not allow for adequate returns, given the price cuts introduced initially by TE.”
The research firm pointed out that TE plans to keep its stake in Vodafone Egypt to shield off any potential drop in profitability as it contributes heavily to the company’s bottom line.
“We assume a dividend payout ratio of 40% on 2017 earnings, translating into a dividend yield of 7.3%,” Pharos highlighted.
In September, TE announced launching the fourth mobile network “WE” in Egypt to be the first fully-integrated telecom operator in the country.
By the end of Thursday’s trading session, TE’s stock fell 1.16% to EGP 13.68.
