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Equity Bottom-Up

Telenor reported another mixed quarter, as the second quarter featured stronger organic revenue growth but weaker EBITDA margins. The firm reported first-half organic revenue growth of 0.5% year over year versus our full-year projection of a 0.1% decline. We are maintaining our NOK 164 per local share fair value estimate and narrow moat rating. We believe the shares are fairly valued
Telenor’s fiber service continues to expand within the home market of Norway, adding 10,000 subscribers in the…

Telenor is the incumbent telecom operator in Norway, with significant exposure to other Nordic countries. Its business generates significant free cash flow (we expect about NOK 20 billion on average annually for the next five years, excluding asset sales). Many European telecom operators have had exposure to other countries with similar cultural or geographic positions but have only recently sought to grow via expansion into emerging markets. In contrast, Telenor has benefited from a culturally…

We are placing our fair value estimate for Telenor under review. We will publish an updated report and valuation by June 15.

Telenor reported mixed first-quarter results with stronger revenue growth but weaker EBITDA margins. However, we don’t anticipate any significant changes to our NOK 164 per local share fair value estimate and narrow moat rating. We believe the shares are fairly valued. The firm reported revenue growth of 1.8% year over year versus our full-year projection of a 0.1% decline
In its home market of Norway, Telenor is having success with its fiber service, which added 11,000 customers in the…

Telenor announced April 9 that it agreed to acquire a 54% position in DNA, the third-largest wireless phone company in Finland, from DNA’s two largest shareholders. Once that deal is completed, Telenor will make a general offer for all outstanding shares at EUR 20.90 per share. Telenor will initially pay EUR 1.5 billion for the 54% stake, which values DNA at about 11.1 times enterprise value/EBITDA, at the high end of phone company valuations. However, DNA is a fully converged operator, so…

Norway

Telenor ASA is an international provider of tele, data and media communication services, and has mobile operations in 13 markets across the Nordic region, Central and Eastern Europe and Asia. The Group also offers fixed telephony, broadband and TV services in the Nordic region.