Select Multiples of Telefonica and Its Peers



Price performance of Telefonica and select peers

In the previous parts of this series, we took a look at Telefonica’s (TEF) 3Q15 performance. In this part, we’ll look at some of the metrics for Telefonica and its peers as of December 3, 2015. Let’s start by looking at how their stocks have performed in the last 52 weeks.

In the last 52 weeks, Telefonica’s price has declined ~24.4%, while Orange (ORAN) and Vodafone (VOD) have decreased ~3.8% and ~6.2%, respectively.

[marketrealist-chart id=868475]

BT Group (BT) and Deutsche Telekom (DTEGY) have had 52-week price increases of ~13.1% and ~10%, respectively, as of the same date.

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Earnings multiples of Telefonica and peers

As of December 3, 2015, Telefonica was trading at a forward PE (price-to-earnings) multiple of ~18.95x. Vodafone was trading at a forward PE multiple of ~41.3x. On the same date, Orange and Deutsche Telekom were trading at forward PE multiples of ~13.5x and ~20x, respectively. America Movil (AMX) was trading at a comparable PE of ~10.7x.

On the same date, US telecom giants AT&T and Verizon had forward PE multiples of ~11.7x and ~11.2x, respectively.

Analyst recommendations for Telefonica

Now let’s look at the expectations of Wall Street analysts for Telefonica stock. According to Telefonica, citing Bloomberg data, ~42.5% of analyst recommendations were “buy,” 32.5% were “hold,” and ~25% were “sell” as of the end of November 2015.

Instead of taking a direct exposure to Telefonica stock, you may consider taking a diversified exposure to the company by investing in the WisdomTree Europe Hedged Equity ETF (HEDJ). HEDJ had ~5% of its holdings in Telefonica at the end of November 2015.


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