We raise our TP to €127 and keep Altice on our ING Benelux favourites list as we believe:
(1) synergies from NUM-SFR will beat expectations;
(2) Altice shares offer a potential 14% upside pa over 2015-18F at current scope;
(3) Altice has the financial headroom to make more value-added acquisitions.
SOTP raised to €127. We raise our SOTP-based TP to €127, mainly driven by:
(1) a higher valuation for France, as we have gained confidence that NUM-SFR will expand EBITDA margins towards 46% by 2021F (previously 42%). Note that our SOTP no longer includes a 55% probability that NUM-SFR will acquire Bouygues Telecom; and
(2) a higher valuation for Portugal, as Portugal Telecom’s (PT) FY14 results beat our expectations, allowing us to
raise our 2015F EBITDA by c.6%.
...Full note attached