France Telecom - ADR (FTE)

We are downgrading our recommendation to Underperform on France Telecom (FTE - Analyst Report). The company reported lackluster results in the first nine months due to weak mobile device sales in France, higher VAT rates and challenging economic conditions in Egypt and Cote d'Ivoire.

Although Conquests 2015, exiting of minority holdings, expanding in emerging markets and cost-saving programs remain in place, we believe persistently weak economic conditions, labor concerns, lower mobile termination rates and unfavorable regulatory measures across its key European markets might restrict the upside potential of the stock.

France Telecom continues to invest in the deployment of mobile broadband and fiber optic network in France, 2G and 3G roaming facilities as well as expansion in emerging markets. We believe these investments might increase the company's cost of operation, resulting in lower profits.

France Telecom - ADR (FTE) : FULL ANALYST REPORT

Read the full analyst report on FTE