Telecom provider 1&1 9M EBITDA rises on enterprises & networks segment growth

Overview

• Germany telecom provider's nine-month revenue rose 1.2% yr/yr to EUR 3.4 bln

• Comparable operating EBITDA up 11.4%, driven by improvements in Enterprises & Networks segment

• Company confirms 2026 forecast and outlook for 2027 and 2028

Outlook

• 1&1 expects 2026 service revenue to be at prior year's level of €3,661.8 mln

• Company revises 2026 EBITDA forecast to about €740 mln due to non-recurring expenses

• 1&1 expects operating EBITDA to rise by €100 mln per year in 2027 and 2028

Result Drivers

• TARIFF PORTFOLIO CHANGES - Co said decline in mobile internet contracts was due to repositioning of discount tariff portfolio, including discontinuing low-cost tariffs and reducing data allowances

• ENTERPRISES & NETWORKS IMPROVEMENT - Operating EBITDA in Enterprises & Networks segment improved significantly yr/yr

• NON-RECURRING EXPENSES - Q3 earnings were impacted by about EUR 60 mln in non-recurring expenses from transformation and restructuring at 1&1 Versatel

Company press release:

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 5 "strong buy" or "buy", 5 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the wireless telecommunications services peer group is "hold."

• Wall Street's median 12-month price target for 1&1 AG is €25.60, about 5.1% above its November 11 closing price of €24.35

• The stock recently traded at 23 times the next 12-month earnings vs. a P/E of 15 three months ago

Reuters Recommended Reads

• Nov 9 - Vodafone Deutschland to axe 2,300 jobs as it steps up cost-cutting efforts

• Nov 10 - Vodafone raises guidance despite German business slipping into decline

• Nov 9 - UK's Kainos Group H1 revenue rises 37% on public sector contracts

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)