Deutsche Telekom Slips as Bernstein Flags T-Mobile US Merger Risk and Cooling German Broadband
Article excerpt
Bernstein has turned more cautious on Deutsche Telekom, cutting its rating on the Bonn-based carrier from "Outperform" to "Market-Perform" and slashing its price target from EUR 37 to EUR 28.10. The downgrade, reported on Friday, reflects a pair of pressures weighing on the group: uncertainty over a potential full merger with its American subsidiary and a marked slowdown in its home broadband business. The stock was trading at EUR 26.85 on the day, roughly 22 percent below its 52-week high of EUR 34.35. A separate quote put the shares at EUR 26.95. At the heart of Bernstein's concern is speculation about a complete tie-up with T-Mobile US. If Deutsche Telekom were to buy out the remaining minority stake at a 20 percent premium, existing shareholders in the parent would face dilution of about 11 percent. Under that scenario, former T-Mobile US minority owners would end up holding roughly 42 percent of the combined group. The numbers lay bare just how much the German parent depends on its US arm. Deutsche Telekom's stake in T-Mobile US accounts for about 64 percent of the Bonn company's entire market capitalization. Bernstein rates T-Mobile US itself at "Market-Perform" with a price target of USD 220, and the analysts' US team holds a neutral view of the business. Within the European telecom sector, the research house now favors Britain's BT over the German incumbent. Should...
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At Audi's plant in Ingolstadt, Deutsche Telekom and software provider Unikie are testing autonomous vehicles, using a 5G campus network and edge-cloud systems to trial the self-driving loading of cars onto rail wagons.
