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Telecom Plus downgraded by Berenberg

06 April 2016 14:52

Berenberg has downgraded its investment rating on Telecom Plus (LON:TEP) to hold from buy, which it says is due to the constraints on pricing provided by its long-term supply agreement with npower, leaving the value proposition lacking at present.

The broker added: "With wholesale commodity prices weakening further and the gap between the cheapest and most expensive suppliers persisting, we think growth at the firm will continue to be hampered in the coming years."

Berenberg has cut its price target to 1,000 pence per share from 1,400 pence, which it said was to reflect a more appropriate peer group.

Analysts also pointed out that Telecom Plus trades on 15.1x FY 2017E P/E with a 5.3% yield.

At 2:52pm: (LON:TEP) Telecom plus PLC share price was -47.75p at 835.25p

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