(News Bulletin 247) – Morgan Stanley on Monday raised its opinion on the Orange stock, from ‘online weighting’ to ‘overweight’, while raising its price target from 12.5 to 14 euros.
The analyst estimates that the mobile group is able to increase its free cash flow (FCF) by more than 10% per year, not only thanks to the reduction of its capital expenditure, but also via the improvement in operating profit.
Gold Morgan Stanley emphasizes having identified a strong correlation between the operator’s share price and its ability to generate cash, the period of weakening of the FCF in 2010-2019 having coincided with a weakening of its stock market performance.
The financial intermediary stresses that the operator is also exposed to other themes that it considers promising, such as possible mergers in France or Spain, changes to its management team and a simplification of its organizational structure.
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