Telecoms, Orange: the pear in two

Stock market often varies, very crazy who relies on it. It was necessary to look across the Atlantic in a semi-cryptic formula from Fed Chairman Jeff Powell on the « appropriate moment » to stop tightening the monetary vice, the reasons for the unjustified sanction of the Orange title, however one of the refuges of the CAC 40 this year, in its top 5 even after the decline of 2.3% on Thursday.

The apparent delay in the annual growth target for Ebitda after rents, still targeted at between 2.5% and 3% after 0.7% in the first half, is only a sham on the accounting effect of employee share ownership plans. The organic cash flow of telecoms, exempt from this impact, is also there.

The only broken thread remains the business services activity, but even its 25% fall in profits, set to be halved in the second half, does not interrupt the good connection of the telecoms margin, which is on the rise for the second consecutive quarter. The easing of competition on mobile phones in France finally authorizes a policy of reasonable price increases (+2% in one year on convergent offers) favored by the inflationary context.

The AlphaValue analyst sees this as confirmation of Orange’s entry into a virtuous circle of cash flows, thanks to the reduction in investments, which will facilitate the development of the strategic plan promised for early 2023 by Christel Heydemann, his new boss. Investors could have cut the pear in half, but their return to “quality stocks” is a unique dish.

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