Taking Stock of Telefónica (BME:TEF)’s Valuation After Its NYSE ADR Delisting Decision
Telefónica (BME:TEF) has stirred fresh debate after deciding to voluntarily delist its American Depositary Shares from the New York Stock Exchange. This move reshapes how U.S. and international investors access the telecom group’s equity exposure.
See our latest analysis for Telefónica.
The delisting move lands after a choppy spell for Telefónica, with a 30 day share price return of minus 6.43 percent and a 90 day share price return of minus 22.91 percent. At the same time, the 5 year total shareholder return of 44.67 percent shows that long term holders have still been rewarded, suggesting recent momentum is fading rather than broken.
If this shift in Telefónica’s listing strategy has you rethinking where you look for opportunities, it could be a smart moment to explore fast growing stocks with high insider ownership.
With the shares trading at a double digit discount to analyst targets and an even steeper gap to some intrinsic value estimates, the key question is clear: is Telefónica now undervalued, or is the market already pricing in future growth?
Most Popular Narrative: 22.6% Undervalued
With Telefónica’s fair value estimated modestly above the recent €3.49 close, the most followed narrative argues the market is underpricing its long term cash generation.
The completion of large scale portfolio optimization and monetization of non core assets (sale of Argentina, Peru, Colombia, Uruguay, Ecuador, etc.) is reducing geographic risk and freeing up significant capital (€3 billion+). The strategy to focus on core markets (Spain, Brazil, Germany, UK) enables redeployment of resources to higher return areas, improving free cash flow and ROCE.
Curious how shrinking revenues can still support a higher valuation? The narrative leans on a powerful earnings rebound, richer margins, and a future profit multiple that challenges today’s pessimism. Want to see the exact assumptions behind that conviction?
Result: Fair Value of $4.51 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, persistent high leverage and stagnation in mature core markets could easily undermine those upbeat margin and earnings assumptions.
Find out about the key risks to this Telefónica narrative.
Build Your Own Telefónica Narrative
If you see things differently or want to dive into the numbers yourself, you can build a personalized view in just a few minutes: Do it your way.
A great starting point for your Telefónica research is our analysis highlighting 3 key rewards and 3 important warning signs that could impact your investment decision.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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