Yahoo Finance Telefonica's (TEF) Shares Move Further up on Spanish Vineyard Deal
Telefonica, S.A. TEF has reportedly entered into a deal to digitally transform Bodegas Borsao, a Spanish company with more than 2,100 hectares of vineyards and 375 winegrowers, with an objective to make the latter’s operational and logistical processes more efficient. Telefonica’s technology segment has been recently gaining traction owing to the robust performance of managed & professional services from success stories like these.
The project is due to be carried out by Geprom, Telefonica Tech’s industrial automation company. Dario Cesena, CEO at Geprom, said on Monday that the introduction of the Warehouse Management System and Manufacturing Execution System capabilities gives Bodegas Borsao “an unprecedented competitive advantage by having a global vision of the production process and the ability to make better decisions aimed at improving business planning.” The telecom company’s shares advanced 1% in the session with this deal going through.
Telefonica, which is part of the Zacks Diversified Communication Services industry, is riding on the success of its tech segment. Since the beginning of the year, the share price of this telecommunications services company has surged 13.7% compared with the industry’s 4.9% growth.
The Zacks Consensus Estimate for its current-year earnings has improved 27.6% over the past 60 days, and is pegged at 37 cents per share, indicating a year-over-year increase of 5.7%.
Challenges
Even as the company has made excellent progress in 2023, its performance has been affected by the weakness in the Virgin Media-O2 business owing to a decline in fixed revenues and B2B revenues. Risks in relation to anti-corruption laws compliance and stiff competition have also been major concerns.
Zacks Rank & Competition
Telefonica, which currently sports a Zacks Rank #1 (Strong Buy), looks set to trump competitors from the same segment, such as Vivendi SE VIVHY and BCE Inc. BCE, in the near term. Both companies have lagged the industry in price performance.
Vivendi and BCE currently carry Zacks Rank #2 (Buy) and 3 (Hold), respectively. You can see the complete list of today’s Zacks #1 Rank stocks here.
Bottom Line
Telefonica’s commitment to innovation, technological advancements and customer-centric operations has cemented its prominence in the industry, and placed it ahead of its peers. Its penetration in the markets of Spain, Germany and Brazil has acted as a major tailwind.
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