The Federal Court has ruled that the proposed merger with Vodafone Australia can go ahead. The merger is expected to be completed in mid 2020. UBS considers the development broadly neutral for the sector.
The merger removes the potential for an aggressive fourth player and, while it creates a larger third player, the merged entity has stronger incentives to act rationally.
The broker raises the target to $8.40 from $6.60 to reflect the merged valuation. Neutral maintained.
Sector: Telecommunication Services.
Target price is $8.40.Current Price is $8.06. Difference: $0.34 – (brackets indicate current price is over target). If TPM meets the UBS target it will return approximately 4% (excluding dividends, fees and charges – negative figures indicate an expected loss).
