Zacks Investment Research Downgrades Telefonica SA (NYSE:TEF) to Strong Sell

Telefonica SA (NYSE:TEF) was downgraded by Zacks Investment Research from a “buy” rating to a “strong sell” rating in a research note issued on Thursday.

According to Zacks, “Over the past three months, shares of Telefonica moved down 6.28% compared with the Zacks Diversified Communication Services' industry's 0.15% fall. Moreover, the company continues to face stiff competition in the domestic and Latin-American markets. Notably, in Latin America, Telefonica competes with large global telecom operators like AT&T and America Movil. The fallout of the company’s IPO plans and downgradation by Moody's Investors Service was a major setback. The downgrade came on the back of the company’s debt laden balance sheet. However, we believe Telefonica should benefit from the launch of video services in several Latin-American markets, widespread adoption of broadband and data services, pricing revision, network enhancement and strategic collaborations, continued focus on organic growth and portfolio optimization. Telefonica is also capitalizing on the opportunities in the digital world.”

Several other equities research analysts have also issued reports on TEF. ValuEngine raised shares of Telefonica SA from a “buy” rating to a “strong-buy” rating in a report on Friday, July 7th. BNP Paribas assumed coverage on shares of Telefonica SA in a report on Wednesday, May 31st. They set a “neutral” rating on the stock. TheStreet raised shares of Telefonica SA from a “c” rating to a “b” rating in a report on Thursday, May 25th. BidaskClub lowered shares of Telefonica SA from a “hold” rating to a “sell” rating in a report on Thursday, June 22nd. Finally, Barclays PLC lowered shares of Telefonica SA from an “equal weight” rating to an “underweight” rating in a report on Friday, May 12th. Three research analysts have rated the stock with a sell rating, five have given a hold rating, eight have given a buy rating and one has issued a strong buy rating to the stock. The stock has a consensus rating of “Hold” and a consensus price target of $10.69.

Shares of Telefonica SA (TEF) opened at 10.67 on Thursday. Telefonica SA has a 1-year low of $8.15 and a 1-year high of $11.64. The company has a market capitalization of $54.01 billion, a PE ratio of 20.13 and a beta of 1.32. The stock’s 50 day moving average is $11.00 and its 200 day moving average is $10.47.

The company also recently declared a dividend, which was paid on Thursday, June 29th. Stockholders of record on Thursday, June 15th were given a $0.168 dividend. The ex-dividend date of this dividend was Tuesday, June 13th. Telefonica SA’s dividend payout ratio (DPR) is currently 98.08%.

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Hedge funds and other institutional investors have recently modified their holdings of the company. HighTower Advisors LLC increased its position in shares of Telefonica SA by 1.2% in the first quarter. HighTower Advisors LLC now owns 17,725 shares of the utilities provider’s stock worth $198,000 after buying an additional 215 shares during the period. Ballentine Partners LLC increased its position in Telefonica SA by 1.2% in the first quarter. Ballentine Partners LLC now owns 33,699 shares of the utilities provider’s stock worth $376,000 after buying an additional 392 shares during the last quarter. Bank of New York Mellon Corp increased its position in Telefonica SA by 0.3% in the first quarter. Bank of New York Mellon Corp now owns 172,881 shares of the utilities provider’s stock worth $1,935,000 after buying an additional 436 shares during the last quarter. CIBC World Markets Inc. increased its position in Telefonica SA by 4.0% in the first quarter. CIBC World Markets Inc. now owns 34,263 shares of the utilities provider’s stock worth $383,000 after buying an additional 1,325 shares during the last quarter. Finally, M&T Bank Corp increased its position in Telefonica SA by 5.0% in the first quarter. M&T Bank Corp now owns 32,261 shares of the utilities provider’s stock worth $361,000 after buying an additional 1,525 shares during the last quarter. Hedge funds and other institutional investors own 0.93% of the company’s stock.

Telefonica SA Company Profile

Telefonica, SA is an integrated and diversified telecommunications group operating in Europe and Latin America. The Company’s services and products include Mobile business, Fixed-line telephony business and Digital services. Its segments include Telefonica Spain, Telefonica Brazil, Telefonica Germany, Telefonica United Kingdom and Telefonica Hispanoamerica (formed by the Company’s operators in Argentina, Chile, Peru, Colombia, Mexico, Venezuela and Central America, Ecuador and Uruguay).

Analyst Recommendations for Telefonica SA (NYSE:TEF)

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