TPM – UBS rates the stock as Upgrade to Neutral from Sell

FY19 results were in line with UBS estimates. The broker suggests the NBN aspirations could begin to affect forward earnings. The company expects FY20 to be the peak in headwinds from the NBN with the drag on earnings lifting to -$110m.

Uncertainty about the merger process with Vodafone Australia is also having its impact. The Federal Court hearing is scheduled for September 10, although UBS envisages the potential for appeals to prolong the process further.

As the stock has underperformed over the last 12 months the broker upgrades to Neutral from Sell. Target is raised to $6.60 from $5.80.

Sector: Telecommunication Services.

Target price is $6.60.Current Price is $6.56. Difference: $0.04 – (brackets indicate current price is over target). If TPM meets the UBS target it will return approximately 1% (excluding dividends, fees and charges – negative figures indicate an expected loss).


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