Telefónica's shares have fallen over 4% in a negative day for the telecom sector in Europe. The situation is exacerbated by the downgrade of Airtel Money's valuation, affecting various operators.
Shares of Telefónica have recorded declines of over 4% today, in a context where the telecom sector has become the most affected in the European equity market, according to the publication expansion.com. This drop occurs on a day when other major operators such as Deutsche Telekom, Orange, and Vodafone are also experiencing declines ranging from 3% to 5%.
The origin of this stock market crisis is linked to a news report from Bloomberg indicating a drastic downgrade in the valuation of the IPO of Airtel Money, which is now seeking to raise at least 800 million dollars, nearly half of its original target of between 1.500 and 2.000 million dollars. This situation has caused a contagion effect on other European telecom companies.
Analysts from Oddo BHF have indicated that weakness in investor demand is prompting many to rotate their portfolios towards technology stocks, which has cooled interest in telecommunications, a sector considered defensive but with limited growth prospects.
Despite the current decline, the Stoxx Europe 600 Telecommunications sector index maintains a positive balance for the year, with growth exceeding 10%. However, Morgan Stanley has downgraded its recommendation on Telefónica, lowering its price target from 4.30 to 3.80 euros per share, representing a reduced upside potential of 2%.
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