Telia Company (OM:TELIA) has set out a broad restructuring plan, aiming to reduce about 900 positions across the Nordics and Baltics and trim operating costs by a targeted SEK 1b each year.
Recent trading reflects that tension between near term restructuring costs and longer term efficiency goals. The share price is at SEK43.57, with a 1 day share price return of 0.83% and a 30 day share price return that declined 4.20%, while total shareholder return over the past year is 26.79% and 3 year total shareholder return is 125.98%. This points to momentum built over a longer horizon even as investors reassess Telia Company's cost cutting plans.
Scan how Telia Company's restructuring compares with other telecoms under pressure to cut costs and protect returns by reviewing our curated list of 225 resilient stocks with low risk scores .
For Telia Company, the share price has already moved over a 1 year and 3 year horizon while the latest restructuring plan is still being digested. Does it make more sense to step in now, or to wait for a cleaner entry on valuation grounds?
Most Popular Narrative: 6.5% Undervalued
On the Simply Wall St narrative, Telia Company screens as modestly undervalued, with a fair value of SEK46.60 compared with the latest close at SEK43.57. That gap rests on analysts tying the restructuring, cost cuts and broadband focus directly to future cash generation.
Transformation and portfolio restructuring, including the exit from non core markets, the sale of part of the Finnish ICT operations with limited EBITDA impact and the Bredband2 acquisition, are reshaping Telia Company toward higher margin connectivity and improving the mix of earnings and return on capital.
See why 14 investors see Telia Company as 7% undervalued .
Result: Fair Value of SEK46.60 (UNDERVALUED)
Still, Telia Company's story can be knocked off course if Norway's loss making operations drag longer than expected or if Finnish competition keeps EBITDA close to flat.
Find out about the key risks to this Telia Company narrative .
Another View: Telia Company Looks Expensive On Earnings
Looking at Telia Company through a simple P/E lens gives a very different picture from the DCF story. The current P/E of 34.9x is far above the European telecom average of 15.3x and the peer average of 14.9x. It is also high compared with a fair ratio of 24.3x that the market could move towards, which points to valuation risk if sentiment cools.
For investors weighing these conflicting signals, it helps to see how the earnings based view lines up against cash flow expectations in more detail. You can do this in the See what the numbers say about this price — find out in our valuation breakdown. .
Next Steps
Mixed messages in the data or a clear tilt one way. Step in quickly, review both the risks and potential upsides, and weigh the 2 key rewards and 2 important warning signs .
Looking for more investment ideas beyond Telia Company?
If Telia Company's mixed signals leave you wanting a broader watchlist, use this moment to widen your opportunity set before the next wave of moves.
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Target quality at a discount by scanning our 185 high quality undervalued stocks that combine solid fundamentals with prices that lag their estimated worth.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include TELIA.ST .
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