Tele2 Earnings: Starts 2024 on a Strong Footing After Beating Consensus; Xavier Niel Gets 29% Stake

Narrow-moat Tele2 shares rose 6% after it reported first-quarter results as the firm beat company-compiled consensus estimates for EBITDA after leases and free cash flow. Sweden’s service revenue grew by 4% and EBITDAaL grew 2% organically as price increases in mobile and broadband kicked in while subscribers also grew. Even after price increases, Tele2's pricing plans remain significantly below those of Telia, so we expect Tele2 will continue to increase market share steadily while raising prices moderately. Tele2 has started 2024 on the right foot, with its revenue and EBITDAaL guidance looking within reach. We maintain our SEK 100 fair value estimate and shares remain fairly valued after a 12% rally since the beginning of 2024.