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Orange SA ADR ORAN

Morningstar Rating
$11.58 0.00 (< 0.01%)
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Company Report

Orange Earnings: Meets 2023 Financial Expectations; MasMovil Deal Loses Attractiveness

Orange delivered on its financial outlook for 2023, and has set targets for the next two years after the deconsolidation of the Spanish business and merger with MasMovil is complete. Revenue increased 1.8% organically to reach EUR 44.1 billion, driven by growth in service revenue, partially offset by an expected decline in wholesale service revenue. EBITDA after leases reached EUR 13 billion, in line with Orange’s ambition of low-single-digit growth, mainly supported by its Europe and Africa and Middle East divisions. The proposed dividend is EUR 0.72 per share, which Orange intends to raise to EUR 0.75 next year, a target we believe is achievable. Despite its tough position in Spain, we believe Orange is faring well, making modest increases to its dividend, reducing capital intensity, and keeping financial leverage in check. Orange’s midterm target is for net debt/EBITDAal of 2 times, lower than the average for European telecom businesses.

Price vs Fair Value

ORAN is trading at a 23% discount.
Price
$11.58
Fair Value
$58.00
Uncertainty
Medium
1-Star Price
$73.24
5-Star Price
$23.70
Economic Moat
Kvbc
Capital Allocation
Dgsqpftv

Bulls Say, Bears Say

Bulls

Orange is the leading telecom operator in France, owns the best mobile and fixed-line networks, and enjoys long-standing relationships with the government.

Bears

Orange is at the mercy of Iliad’s pricing strategy in France, which will have the last word in the mobile competitive environment. On top of that, Orange is limited by the French government on the amount of personnel cost reductions.

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News

Trading Information

Previous Close Price
$11.58
Day Range
$11.5511.59
52-Week Range
$10.9713.08
Bid/Ask
$11.58 / $11.59
Market Cap
$30.78 Bil
Volume/Avg
17,591 / 278,722

Key Statistics

Price/Earnings (Normalized)
11.97
Price/Sales
0.65
Dividend Yield (Trailing)
6.47%
Dividend Yield (Forward)
6.47%
Total Yield
6.52%

Company Profile

Orange is the incumbent telecom operator in France. The company operates fixed and wireless businesses in France, where it is the market leader ahead of Iliad, Bouygues, and SFR. Orange also has fixed and wireless (convergent) operations in Spain, Poland, Belgium, Luxembourg, and Central Europe (Romania, Slovakia, Moldova). Around 15% of revenue comes from emerging African markets, where the company only operates wireless networks, and 20% comes from the enterprise segment, which serves companies with more than 50 employees in France and internationally.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Value
Total Number of Employees
127,109

Competitors

Valuation

Metric
ORAN
TEF
EN
Price/Earnings (Normalized)
11.9712.7213.98
Price/Book Value
0.870.991.15
Price/Sales
0.650.540.25
Price/Cash Flow
2.361.883.47
Price/Earnings
ORAN
TEF
EN

Financial Strength

Metric
ORAN
TEF
EN
Quick Ratio
0.710.710.81
Current Ratio
0.850.890.94
Interest Coverage
3.750.154.47
Quick Ratio
ORAN
TEF
EN

Profitability

Metric
ORAN
TEF
EN
Return on Assets (Normalized)
2.71%−0.65%2.33%
Return on Equity (Normalized)
9.33%−2.89%11.17%
Return on Invested Capital (Normalized)
6.56%1.59%5.71%
Return on Assets
ORAN
TEF
EN
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