Consolidation is not the panacea: After a number of attempts to consolidate the French telecoms market, telcos are again poised to hold M&A talks during 2017, following the country’s presidential elections in Q2. We, however, are not strong believers that consolidation will happen in 2017, although Bouygues Telecom’s position remains uncertain. Instead, we believe that the operational story will drive the stocks in 2017 and the divergence in strategies opens investment opportunities.
- We initiate coverage of Iliad with a Buy rating and a price target of €250
- We initiate coverage of SFR Group with a Sell rating and a price target of €24.50
- We initiate coverage of Orange with a Hold rating and a price target of €16.00
- We maintain our Hold rating on Bouygues and raise our price target from €31.00 to €35.70