Rankings Software, cloud & internet Telefónica
Telefónica
80
15070100
A view of the same findings, not a new score. How it works
A strong score: the model found few serious problems, but analysts see limited upside from here.
Biggest deductions
- Margin and ROIC−5
- Debt−5
- Quality of growth−4
Strengths
- Raised guidance+1
- Growth in Brazil+1
How the score is built
From 100 to 80, step by step: points off for the business, the price and the cracks, back for documented strengths, then three data adjustments.
Start
Score
Hover or select a step to see what drove it. Steps with findings open them below.
Key numbers
As of 3 Nov 2026. Analyst targets tend to be optimistic; read upside as a hint, not a forecast.
- Price
- 3.40 EUR
- Median analyst target
- 3.80 EUR
- Upside to median
- +11.6%
- Analysts
- 22
- Target range
- 3.00 – 4.90 EUR
- 52-week change
- −22%
- P/E (trailing)
- n/a
- Forward P/E
- 9.2
- PEG
- 0.28
Findings
Every deduction and every plus, with its source. Open a step to read them.
Business
Is the company getting stronger, not just bigger? · 3 findings−12 of −30
- −5Margin and ROICOperating margin 4.0% TTM (4.3–12.9% in 2021–2025) and ROIC 2.7% (3.0–5.6% in 2021–2025); net income has been negative four years in a row (−4.6bn in 2025) due to write-downs and losses on disposals. The return does not cover the cost of capital.
- −4Quality of growthRevenue has fallen from EUR 41.5bn (2023) to 36.2bn TTM; in H1 2026 the group grew only 1.7% and Spain 2.5% (EBITDA +2.1%), while Germany and the UK faced headwinds. Growth is carried by Brazil.
- −3Capital allocationThe dividend of EUR 0.30 was held for five years, even though FCF after leasing was only 1.7–2.3bn vs. dividends of about 1.7bn plus buybacks; it is now halved to EUR 0.15 for 2026. The distribution was in effect partly debt-financed in a period of high debt.
Price
Today's multiples against the company's own history and its peers. · 1 finding−3 of −35
- −3Multiples vs own history and peersForward P/E 9.4 is at the bottom of 9.6–12.7 (2021–2025), but EV/EBITDA 7.3 is mid-range in 6.6–8.7 and above Orange (6.5), and P/B 1.04 is at the top of 0.61–1.11. The low P/E reflects the debt: EV is 58.7bn vs a market cap of 19.1bn.
Cracks
Cash flow, customers, debt, insiders, guidance and what sits behind the headline numbers. · 4 findings−10 of −35
- −5DebtNet financial debt EUR 25.3bn (June 2026); including leases, net debt/EBITDA is 5.3x, interest cover 0.79x and Altman Z 0.89. The balance sheet constrains both dividends and investments.
- −2Competition and analyst downgradesMorgan Stanley cut its price target from 4.30 to EUR 3.80 on 17/9-2026, citing the balance between net investment, profitability and competition (including Digi) in Spain, and Bernstein cut from 4.50 to EUR 3.80 on 25/9-2026.
- −2Governance and state influenceThe Spanish state (SEPI 10%), CriteriaCaixa (9.99%) and Saudi STC (9.97%) together control about 30%; SEPI had the CEO replaced in January 2025 and holds the vice-chairmanship. The strategy is subject to political considerations; insiders own 0.05%.
- −1Restructuring in GermanyTelefónica Deutschland required a restructuring provision in H1 2026, and revenue in Germany has fallen from €8.6bn (2023) to €7.8bn TTM.
Plus
Only documented strengths. · 2 findings+2 of +15
- +1Raised guidanceGuidance for adjusted OpCFaL growth in 2026 raised to above 3% (previously above 2%); adjusted EBITDA +3.8% in H1, and net debt fell 8.4% in a year.
- +1Growth in BrazilVivo (Brazil) increased revenue 12.5% and adjusted EBITDA 15.1% in H1 2026; convergent Vivo Total customers +29% to 3.8m.
Caveats
What the score does not capture, or where the data is weak.
Telecom does not fit the industry list; 'Software, cloud & internet' was chosen as the nearest (same as Orange, Deutsche Telekom and Telenor). The reported loss (−EUR 3.6bn TTM, −338m in H1 2026) is mainly due to the exit from Latin America (Chile about −1.0bn) and a restructuring provision in Germany; the result from continuing operations was +954m in H1. Forward P/E and EPS forecasts are adjusted figures. stockanalysis' FCF (3.7bn) is before leasing; after leasing it is 1.7bn TTM, and the company's guidance is about 3.0bn for 2026. The revenue forecast (−7% in 2026) reflects divestments. Morgan Stanley's fall in ownership from 13.1% to 8.4% is due to expired derivatives linked to STC and is not counted. Brazil's growth in H1 is in euro and may include currency effects. Q3 figures 12 Nov 2026.
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