First half results were in line with expectations. Excluding mobile network impairments, underlying operating earnings (EBITDA) were up 3%. Morgans believes this was a strong result in the face of NBN margin pressure.
The near term outlook is dependent on whether or not the ACCC will allow the merger with Vodafone Australia. The company expects a final decision in May.
Morgans believes the deal should be allowed to proceed, as having a stronger and better funded third operator is better for consumers in the medium term. Hold rating and $6.65 target maintained.
Sector: Telecommunication Services.
Target price is $6.65.Current Price is $7.10. Difference: ($0.45) – (brackets indicate current price is over target). If TPM meets the Morgans target it will return approximately -7% (excluding dividends, fees and charges – negative figures indicate an expected loss).
