(BFM Stock Exchange) – The only large telecom group still present at the Paris Stock Exchange has been more than 30% since January 1, surpassing CAC 40. This is a performance for a defensive value. The company reassured the trajectory of its profitability in France, benefited from its reassuring profile, and speculation on market consolidation.

If there is a stock market card that is surprising on this first part of 2025, it’s Orange.

The Telecoms group, the only side apart from the four major French operators since the withdrawal of Iliad from the Paris Stock Exchange in 2021, has taken 32.27% since January 1 and outperform the CAC 40, which is 6.9% over the same period.

Which turns out to be impressive for Orange, an action with “low beta”. Which, to simplify, means that it usually varies in lower proportions that CAC 40. The performance of recent years tends to demonstrate it.

The action lost 1.4% in 2022, when the index fell 9.5%, then it took 11% in 2023, when the CAC 40 won 16.5%. The title then fell 6.6% in 2024, against a decline of 2.15% for the large barometer of the Paris Stock Exchange.

Orange is therefore experiencing a real stock market alarm clock this year. How to explain your unsuspected journey? Several factors have played.

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Good surprises in France

Orange has managed to thwart unprofitative forecasts. As of the fall of 2024, the market feared competition from competition in the telephony market in France.

This in particular because of the family offers offered, for example, by Free, or Bouygues Telecom. The operators have returned to “conquest of market share” mode with advantageous prices.

At the end of 2024, Morgan Stanley feared that Orange’s profitability in France, a country which represents 57% of the value of the company on the stock market, according to the bank, is found under pressure.

The establishment anticipated a decline in 2025 of the largest indicator of the company’s results, the Ebitdaal (the gross operating result after rents) in France. Morgan Stanley awaited a decrease of 1.5% in 2025 and 1.1% in 2026.

For the time being, Orange is resistant to this intensification of competition. “We talked a lot about prize war on the French market in 2024. But the recent publications of the company, in particular its annual results, reassured the market. The group intends to increase its main profitability indicator, Ebitdaal, in France this year, even more in 2025 than in 2024. Which means that the company manages to compensate for the impact of promotional intensity by reducing its costs,” explains Stéphane Beyazian, explains Analyst at Oddo BHF.

Orange had indeed indicated Table, in 2025, on an Ebitdaal growth slightly higher than that of last year for France. This target was confirmed at the end of April, after the publication of the accounts of the first quarter, Orange considers itself “on the right track” to reach it.

The telecoms group is “on the right path to improve the growth of its Ebitdaal, despite recent prices pressure in France,” said UBS.

Defensive qualities

Another asset in Orange’s Channel has attracted the market: its income base focused on France, Europe, Africa and the Middle East. This means that the group has no direct exposure to American customs duties.

What attract investors looking for safety and visibility. Especially since the company presents a rate of yield of the dividend of 6%, according to the independent AlphaValue design office, a fairly high figure within CAC 40.

“In the context of a very uncertain market at the beginning of the year, the values ​​of growth like tech and luxury were heckled. Investors then turned away from cyclical values ​​to go to defensive actions in the event of economic recession, like Orange,” explains Stéphane Beyazian.

Danone, another defensive value of CAC 40, has experienced a similar destiny, progressing by 14.1% since the start of the year. The two actions were among the rare CAC 40s suffering on Monday, when the market found appetite for the risk following the announcement of a truce between the United States and China on customs duties.

The latest title increase in the title is also outside the orange operational. “Another support factor remains the bet of a potential market consolidation. Investors began to anticipate a future acquisition of Altice-SFR by another telecom operator on the French market. Such an operation would have profits for all three market players, especially in terms of price,” explains Stéphane Beyazian.

“We attribute a probability of 50% to such a scenario. At the beginning of the year, we would only have quantified it 20%. Since then, Altice France has restructured its debt, which facilitates a potential sale and resumption of the company,” he adds.

Questioned by BFM Stock Exchange, the Altice France group brought the following commentary: “The group is focused on the implementation of the debt agreement, reflection on the sale of non -essential assets and the continuation of SFR’s trade revival and the improvement of the quality of service, two indicators already well committed as evidenced by the results of the first quarter”.

Still potential

After this rally, can Orange action continue its ascent? UBS is confident. The Swiss bank has a purchase advice, judging that the action offers a potential for catching up, in terms of valuation, within a defensive sector. “The Ebitdaal of France is improving despite the noise on the tariff environment and investors seem more inclined to enhance the visibility on the growth of the cash flow and the yield for shareholders. The (potential, editor’s note) consolidation of France offers rising possibilities”, explains the Swiss bank.

AlphaValue is to be “accumulated” on the title, with a target of courses of 14.8 euros (against an action at around 12.7 euros at present). The independent design office notes that Orange’s valuation discount is being reduced.

“Orange is on a positive trajectory in dividends, providing for an annual growth of 3% over the next five years,” said AlphaValue. In Spain, its Masorange joint venture benefits from a market leader position both in terms of fixed and mobile subscribers, recalls AlphaValue.

This company could introduce itself to the stock market as of March 2026, as explained by the management of Orange during the conference calls according to the results of the first quarter. But if it is only one possibility among others.

More broadly, out of the 19 analysts according to the title, 13 are purchasing or equivalent, five to “keep”, and one for sale, according to a consensus Investing.com. Their average course target (13.59 euros) gives potential of around 7% in the title.