I would Buy TLSN here & Sell Tele 2 - playing a 7% move, support level on the spread 3.5% lower
* Tele2 - Downgraded by Citi today from Buy to Neutral.
The credibility of the company has suffered a few blows in recent months, after the medium term guidance had to be revised and the outcome of the Norwegian auction has seriously damage the value of the asset. However, the guidance appears to be achievable and that could buy Tele2 enough time to execute on portfolio management, as it has done in the past. We believe the investment case is predicated on delivering in that front, which makes Tele2’s
investment case binary.
* Teliasonera
- Teliasonera is trading near lows vs peers, consensus has been quite negtive for few months, we couls see some improvement as the sector is trsding better
- On a chart basis the stock has rebound from good support 46.75/85 levels, we couls quickly see the stock on the 50 levels
Valuation levels look interesting to play this trade