alta ma zgleda boljšo-buy;)

Telekom Slovenije 9M18: Overall results have not changed much, T2 settlement questions remain, while share price significantly corrected.

Telekom Slovenije revenues decreased by 0.7% YoY in 9M18, but this is also due to e-tolling project revenue boost recorded in 9M17. Nevertheless, mobile and wholesale segment revenues are also down, while revenues from fixed broadband segment and new sources are up. Consequently, we have lowered our top line expectations (derived from wholesale segment). EBITDA is also down 0.9%, despite lower labour cost expenditures. All in all, a slight disappointment from quarter to quarter demanded some adjustment of estimates from our part, albeit margin expectation lifted as miss derived from top-line while cost base actually improved. Main question (T2 dispute settlement) remained unanswered, which is a pity. True all other investment thesis and risks remains unchanged. Our target price is set to EUR 79 and is slightly lower from previous report due to peer valuation and higher lawsuit (settlement) deduction. However, price more than corrected itself even before global turmoil in October, so our recommendation is changed to buy as price discrepancy is above 10% and possible LT dividend yield high.