Monday, December 6

Telefónica: the € 1,000M of Treasury, without effects on the valuation

The failure of the National audience that forces the Treasury to return to Telefónica 1,000 million euros in penalty and late payment interest will have no short-term effects on the company’s valuation.

These are taxes incorrectly paid since 2008, the amount of which represents 3.6 percent of the operator’s market capitalization and 3 percent of the net debt.

The amount is important enough to raise Telefónica’s valuation, but the problem is that itAnalysts will not include this revenue projection in their calculations, according to the sources consulted by

Telefónica, awaiting the appeal of the Treasury

“It is a judgment of the National Court but there must be an appeal by the Public Treasury, which is the most normal thing to happen,” he said. Juan Peña, GVC Gaesco Valores analyst, even though it is something “positive”, added this expert.

In this type of legal process, analysts usually do not register the positive impact until it is real, contrary to what happens with the positive. In the end, the revenue may take time to arrive, or it may never arrive.

However, the analysts of Sabadell Bank they explained that it is “positive news” if confirmed, although it would not imply a cash inflow, but rather an accounting adjustment to offset future tax payments.

The cash dividend, transparent to valuations

On the other hand, the CEO of Telefónica, Ángel Vila, dropped at the telecommunications conference organized by Morgan Stanley, that the operator could recover the dividend in cash.

The circumstances of uncertainty that had caused the multinational to switch to the dividend in kind no longer existed, so the group could even switch to the cash dividend.

While this is a good thing for investors if confirmed, it is completely transparent to expert assessments.

In the end, “either the dividend is given in cash or they increase capital to amortize shares, which for the analyst is more or less the same and there is no big impact,” he said. Peña.

The consolidation of the sector, on target

What has been encouraging the most in Telefónica’s price in recent sessions are the rumors of consolidation in Spain, the catalyst that placed the securities on the verge of 4 euros.

In order for Europe to compete it needs large operators and the current fragmentation situation is not helping. The problem is that there is no cake for everyone.

Without further ado, Telefónica’s puncture in Spain, accelerated by cost inflation, completely overshadowed a relatively decent result in the third quarter.

In this sense, village He described the situation as “unsustainable” and assured that the multinational could act as a “facilitator”, given that due to its size it cannot be the protagonist of this consolidation process.

In the good way

The sources consulted understand that the operator will practically not put obstacles in the way of accelerating sectoral concentration, as long as competitors are eliminated from the board.

This is what analysts are waiting for as the next stock market catalyst. “It seems that a little hope is opening because this would be positive for the sector, and it is seen that they are already a little more aware,” said Peña.

Starting with the European Comission, who is in listening mode and open to change her mind.

With the increases in recent sessions, Telefónica’s price stabilized slightly below 4 euros per share.

This will be the first level to attack, and higher is the resistance of 4.35 euros, which are the 2020 highs against which Telefónica collided a few weeks ago.

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