Yahoo Finance Orange shares slip as Jefferies slashes rating of French telecom group
By Scott Kanowsky
Investing.com -- Shares in Orange SA (EPA:ORAN) fell on Monday after analysts at Jefferies downgraded their rating of the telecom company due to weak expectations for annual growth in its key French market.
The analysts argued in a note to clients against consensus estimates that predict Orange's performance in Europe's second-largest economy will be stable going into its 2023 financial year. They said their models indicate that the unit's core earnings are set to slip by 3% due to flat sales and elevated expenses.
Meanwhile, they flagged that prices for Orange's services to new customers are not rising, while the firm's broadband position in less urban markets is facing stronger competition.
Jefferies subsequently lowered its rating for Orange to hold from buy and cut its price target to €10 per share from €12.4 per share.
However, on a group-wide basis, the investment bank still sees Orange delivering on its promised surge in growth heading into the end of its 2022 fiscal period. The business is due to unveil its full-year results on February 16.
Paris-based Orange and many of its biggest rivals in Europe have seen their share prices drop over the past year as they contend with a spike in energy costs and an uptick in interest rates.
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