Telia Earnings: In Line With Expectations Following Cost Savings and New Guidance Announcements

Narrow-moat Telia reported a third-quarter revenue decline of 1%, driven by slightly weaker service revenue growth. EBITDA growth was slightly stronger, roughly flat year on year. These results come in the wake of Telia's recent capital markets day, when management presented new midterm guidance for a 2% service revenue compound annual growth rate and 4% adjusted EBITDA CAGR through 2027. Our forecasts remain more conservative than management owing to the structural challenges we feel the telecom industry faces and the unabating competitive dynamics in Telia’s core markets. These results are broadly in line with our expectations. With no changes to our forecasts, we maintain our SEK 29 fair value estimate. Shares are slightly overvalued.