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Deutsche Bank sees TalkTalk's new strategy 'bearing fruit'
Analysts at Deutsche Bank on Monday reiterated their 'buy' rating for shares in TalkTalk Telecom Group, stating that there is evidence that the company's new and simpler strategy is "bearing fruit".
Deutsche bank analysts also hiked their target price 10p on TalkTalk shares, bumping it up to 180p, and reasoned that the company will likely see top line growth recovery after a "tough" first half of the year.
The broker noted that the market remained "febrile", while also identifying TalkTalk's proposed 'fiber to the home' (FTTH) rollout to 3m UK homes as an investment which will assist the company's progress.
Under the plans, the company would target the 3m homes in mid-size towns and cities through a newly-formed company, owned 20% by TalkTalk and 80% by Infrcapital, created through a potential equity investment of up to £500m.
By the close of trading the company's shares were trading at 108p.
For the half year ended 31 March, TalkTalk reported an operating loss of £18m, down from a profit of £95m, and loss before taxation of £73m, down from a 2017 profit of £70m, after shelling out £119m on one-off reorganisation costs.
Revenue, however, increased by 1% to £1.56bn and the company had reduced its net debt from £782m to £724m.
TalkTalk offers landline, broadband, fiber, TV and mobile services for homes and businesses, has a market cap of £1.25bn and currently registers negative earnings.
As of 1646 BST, TalkTalk's shares were up 9.16% at 118.00p.