Tim on a swing after accounts, but for brokers the rally is not over

(Il Sole 24 Ore Radiocor) - A seesaw session for Telecom Italia in the aftermath of its quarterly report, which was broadly in line with market expectations: the stock opened at the tail end of the FTSE MIB touching a low at 0.6176 with a 2.8% drop to then slowly climb back up and move into positive territory, still not far from the highs from 2018. The tlc group also announced a €400m buy back and a 1:10 reverse split of its ordinary shares.

For Deutsche Bank analysts, the balance sheet was "mixed, with the wholesale segment weighing on the quarter's numbers and domestic ebitdaaL (after-lease) guidance for 2026. On the positive side, free cash flow 2025 above expectations and solid trends in the enterprise'. DB last week downgraded the stock to hold, given the stock's recent rise. Goldman Sachs, which has no rating on Tim, calls Tim's results and guidance update 'positive overall'. The quarter's numbers "were in line with expectations: a combination of weaker revenue mix and timing of wholesale Mvno caused ebitdaaL to be in line with the company's consensus, despite service revenues exceeding estimates by +1.5%". Fcf exceeded expectations by about 40%, while estimates were in line with consensus.

"The new growth guidance for 2026 on revenues and ebitda is, in our view, encouraging: 1-2% and 4-5% for Italia respectively," the analysts note. Overall, they conclude, "we believe investors can be reassured by generally favourable operating trends; savings share conversions in line with the plan, with completion expected in the first half of the year; a shareholder remuneration strategy now outlined beyond that transition; and a Capital Markets Day planned for the second half of the year". Positive elements prevail in Intermonte's analysis, which confirms its buy rating on the stock but improves the target price to €0.75 from €0.74.

'We believe that, despite the impressive share price rally, the share story does not end here. Several developments could emerge by mid-year Capital Markets Day (synergies with Poste, free frequency renewal, Msa negotiations with Inwit, possible all-share acquisition of PosteMobile in the second half of the year, market consolidation), as well as significant flows on the stock driven by increased liquidity once the savings share conversion is completed,' they said in a note.

The improved target mainly reflects the higher mark-to-market valuation of the stake in Tim Brasil and does not yet incorporate the consolidation of the domestic market,the synergies with Poste and the renegotiation of the Msa with Inwit. With these elements, according to Intermonte, Tim could go beyond EUR 1 per share. Finally, according to Banca Akros, Tim's 2026 guidance and synergies with Poste should avoid a further upward revision of the share in the short term, barring new consolidation developments in the sector (Iliad/WindTre and/or Open Fiber/FiberCop merger. Akros made marginal changes to the estimates, confirming the target price (0.63), but revised the recommendation to Neutral (from Buy).