November 20 (SeeNews) - Austria's Raiffeisen Centrobank (RCB) said on Friday it has downgraded its "buy" recommendation on Croatian blue-chip telecommunications company T-HT to "hold".
“We have changed our recommendation on T-Hrvatski Telekom (T-HT) shares from “buy” to “hold” because our expected upside potential is less than 15%. In our opinion,
an improvement in the Croatian economy coupled with a decline in interest rates and cancellation of the 6.0% mobile fee might mean an additional positive stock re-rating”, RCB said in a statement.
“Third quarter results were below our estimates partially due to a 33 million one-off provision for redundancies and the 6.0% fee, which has been applied on mobile revenues from August,” the statement added.
“The company formally started the merger process of wire-line (T-Com) and wire-less (T-Mobile) units, which should bring synergies in the long term. In our view, a possible share buyback might attract investors’ attention in the next few months,” RCB added.
RCB have increased an estimated 12-month cum dividend price target from 283 Croatian kuna ($57/38.6 euro) to 290 kuna per share mainly due to a reduction of risk free rates and partially due to lower capex.
T-HT is majority-owned by Deutsche Telekom.
T-HT shares were traded at 269.5 kuna by 1243 GMT on Friday, 0.31% down from its previous close.
(1 euro = 7.3354 Croatian kuna)