Omwisselen naar het FransAOF) - Although the competitive environment has improved since the third quarter of 2018 in the telecoms sector in France, a sustainable operator discipline remains uncertain. This is what Barclays observes, which paints a gloomy picture of the sector. Thus, Iliad (-2.89% to 90.60 euros), Altice (-8.97% to 1.88 euros) and Bouygues (-1.10% to 32.48 euros) are penalized on the place of Paris . For its part, Orange (+ 0.11% to 13.33 euros) resists this pessimistic view.
Describing "irrational" promotions during the fiscal year, Barclays believes that "prolonged healing of the market is necessary" to protect the profitability of the sector.
But the durability of this healing is uncertain with four players, who have contradictory objectives according to the broker: gain market share for Iliad and Bouygues, protection of market share for Orange, and finally return to the stabilization of revenues for Altice.
In this context, Barclays expects the turnover of the French market in 2019 to deteriorate compared to 2018 and is at the lower end of the spectrum compared to its European peers.
With this in mind, the analysis office posts its caution for 2019, and downgraded certain recommendations.
Thus, Orange and Iliad switch from Overweight to Neutral, with respective price targets adjusted from 18.50 to 16.50 euros, and from 145 to 105 euros.
Orange withstood competitive pressure in 2018 thanks to its difference based on quality, but the year 2019 should prove more difficult underlines Barclays.
As for Iliad, the group has launched new initiatives to better segment its market and is investing heavily in 4G coverage and FTTH. "However, catching the 4G bandwidth, and therefore the perception of quality, will take time," said the British bank.
For its part, Altice goes from Neutral to Underweight, and sees its price target passed from 2.80 to 1.5 euro, after a difficult year operationally.
Only Bouygues keeps his advice Neutral, and sees his price target adjusted from 39 to 37 euros.
Faced with this dark vision of the future of French telecoms, Barclays believes that the consolidation of the market would be the best option, even if it seems unlikely in the short term.