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Telefonica SA ADR TEF

Morningstar Rating
$4.43 +0.07 (1.61%)
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Company Report

Telefonica Expected to Report a Stable 2023

After expanding its operations to many European and Latin American countries during the 1990s and 2000s, Telefonica has turned around its strategy in recent years to focus on four key markets: Spain, the United Kingdom, Germany, and Brazil. Telefonica is divesting or restructuring its Latin American operations (except Brazil) and infrastructure assets such as towers or noncore fiber networks and intends to use the proceeds to reduce debt, a strategy we look favorably upon.

Price vs Fair Value

TEF is trading at a 21% discount.
Price
$4.36
Fair Value
$9.20
Uncertainty
High
1-Star Price
$8.16
5-Star Price
$4.40
Economic Moat
Ggf
Capital Allocation
Vgcgwzmz

Bulls Say, Bears Say

Bulls

Telefonica is executing the right strategy by selling assets and simplifying its corporate structure, which should be a spark for unlocking value.

Bears

It will still take years until Telefonica reshapes its portfolio and reduces debt, as telecom deals move slowly and are usually subject to deep regulatory scrutiny.

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News

Trading Information

Previous Close Price
$4.36
Day Range
$4.424.45
52-Week Range
$3.724.53
Bid/Ask
$4.33 / $4.45
Market Cap
$24.98 Bil
Volume/Avg
728,337 / 788,046

Key Statistics

Price/Earnings (Normalized)
12.08
Price/Sales
0.54
Dividend Yield (Trailing)
7.41%
Dividend Yield (Forward)
7.41%
Total Yield
7.66%

Company Profile

Telefonica operates mobile and fixed networks in Spain (where it is the incumbent telephone operator), the U.K., Germany, Brazil, and other Latin American countries like Colombia, Mexico, Argentina, and Chile, among others. The company derives more than 30% of its revenue from Spain, close to 20% from Germany and 20% from Brazil. Its U.K. operations are held through a joint venture with Virgin Media. For several years Telefonica has been simplifying its corporate structure by selling noncore assets.
Sector
Communication Services
Industry
Telecom Services
Stock Style Box
Large Core
Total Number of Employees
104,142

Competitors

Valuation

Metric
TEF
VOD
ORAN
Price/Earnings (Normalized)
12.0810.4610.94
Price/Book Value
0.960.360.86
Price/Sales
0.540.490.63
Price/Cash Flow
1.871.502.31
Price/Earnings
TEF
VOD
ORAN

Financial Strength

Metric
TEF
VOD
ORAN
Quick Ratio
0.710.860.68
Current Ratio
0.890.890.83
Interest Coverage
0.155.223.80
Quick Ratio
TEF
VOD
ORAN

Profitability

Metric
TEF
VOD
ORAN
Return on Assets (Normalized)
−0.65%2.36%2.84%
Return on Equity (Normalized)
−2.89%6.07%9.89%
Return on Invested Capital (Normalized)
1.59%4.33%9.61%
Return on Assets
TEF
VOD
ORAN
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CHTR
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ORAN
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